| Tuesday October 23, 7:47 PM
Antitrust cloud still hangs over Microsoft amid Windows XP
launch
Microsoft launches its new Windows XP operating system this week
even as the software giant faces the possibility of stiff sanctions
in the United States and Europe for abusing its monopoly
position.
Moreover, critics say the new operating system shows Microsoft
has failed to learn from its antitrust woes and that Windows XP does
further damage to competitors by steering users to services and
websites operated by Microsoft and its partners.
"Windows XP advances the company's illegal anti-competitive
practices and harms the nation's consumers," said a report last
month from a coalition of consumer groups including Consumers Union
and the Consumer Federation of America.
The system, due to be launched Thursday, is controversial because
it incorporates several programs such as media players and instant
messaging that may harm competitors.
Although Microsoft no longer faces an imminent breakup as ordered
last year by a federal judge, the company's antitrust woes are far
from over.
A US appeals court on June 28 had upheld a finding that Microsoft
acted as an illegal monopoly. But it said the breakup of the company
ordered last year by Judge Thomas Penfield Jackson was not justified
by the evidence and that a new penalty must be determined in the
lower court, with a new judge.
On September 6, the US government abandoned its demand for a
breakup of the software titan, saying it was hoping to speed up a
resolution of the case. Government lawyers also have dropped a
complaint that Microsoft unfairly tied the Internet Explorer Web
browser into the Windows operating system.
The new judge, Colleen Kollar-Kotelly, has named a mediator in an
effort to help the parties reach an out-of-court settlement by
November 2.
But at the same time, several states among those that have joined
the federal government lawsuit, have promised to again sue the
company if the remedies fail to adequately address problems in
Windows XP.
And reports have said the European Commission, which is leading
its own antitrust probe, may fine Microsoft billions of dollars if
the company is guilty of using Windows XP to extend its monopoly
position.
Windows XP incorporates a number of new features that in the past
had been separate software that competes with those from Microsoft
rivals.
For example, users will be steered to Microsoft for instant
messaging, media players for audio and video as well as digital
photography.
The operating system will also help direct consumers and business
users to Microsoft's .Net initiatives -- a collection of websites of
Microsoft and its partners.
Part of this initiative is the Microsoft Passport authentication
service, which prompts users to sign in only once to then visit
websites that accept the system.
Mark Cooper of the Consumer Federation said that, with Passport,
"Microsoft is creating an entirely new basis of market power that
would reside in the control of personal information."
Microsoft chairman Bill Gates, in an interview earlier this year
with CNET News.com, said that the company wants the freedom to
innovate and improve its products as it goes up against competitors
like America Online.
"Our customers do want us to make Windows richer and more
reliable," Gates said. "So Microsoft's commitment is to add features
that customers want. Has AOL ever added any new features to their
products?"
Nicholas Economides, a New York University antitrust expert, said
the current environment is not necessarily negative for Microsoft's
launch.
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