Is Windows a Monopoly?
Mike Bilow
mikebw at bilow.bilow.uu.ids.net
Tue Jun 16 18:40:00 EDT 1998
Ralph Nader
P.O. Box 19312, Washington, DC 20036
Ralph at essential.org
James Love
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
202.387.8030 | http://www.cptech.org | love at cptech.org
June 15, 1998
Joel I. Klein
Assistant Attorney General
Antitrust Division
U.S. Department of Justice
Washington, DC
Dear Mr. Klein:
I. Executive Summary
* Microsoft's hostility toward antitrust measures, and the repeated
failure of its management to abide by the letter or spirit of the
agreements they sign, raises serious doubts that Microsoft can
ever be expected to live up to the spirit of antitrust remedies
which are based upon conduct rules. Many consumers and software
developers are appalled at Microsoft's continued efforts to use
the Windows OS as a weapon against its competitors, and its
repeated attacks on non-proprietary Internet and computing
standards, and are now interested in considering alternatives
* Technology is creating opportunities for non-Microsoft operating
systems (OSs). The availability of large hard drives, boot
management software, interoperability based upon Internet open
protocols, modular programming languages that lower costs to port
applications across platforms, and easily cloned GUI interfaces,
make alternative OSs more appealing and practical. One should not
assume that every consumer in the World will always want to use
the same operating system, sold by the same company.
* Today it is impossible to buy a nationally branded personal
computer without buying Microsoft Windows, and consumers cannot
even return Windows for refunds. No nationally branded computer
vendors sells PCs without non-Microsoft operating systems pre-
installed, even as a dual boot option.
* Microsoft uses its market power to discourage PC manufacturers
from offering computers with non-Microsoft products, including
non-Microsoft operating systems. There exist several promising
non-Microsoft alternatives, including free software such as
GNU/Linux or FreeBSD, or new systems like BeOS. It will be
difficult for these alternatives to succeed in the broader
consumer market if consumers cannot buy PCs with the alternative
OS pre-installed.
* The 1995 DOJ/Microsoft consent order has been ineffective in
several important respects. DOJ should seek non-discriminatory
licensing of Windows and Office products, so that PC vendors can
offer non-Microsoft products without fear of retaliation from
Microsoft, and ban per-computer licensing of Windows.
* One of the most important challenges to Microsoft's monopoly is
coming from the free software community, which is organized in a
variety of ways. Free software products have already achieved
significant success in server markets, and are becoming closer to
mass market consumer products.
* The Free software movement represents a major change in the way
that complex software projects are organized, which could become
more revolutionary and perhaps more fundamental than the changes
associated with the Microsoft or Apple challenges to IBM. It is
becoming more important at the same time that companies like Apple
and IBM are abandoning development of mass market operating
systems.
* Developers of free software are concerned that Microsoft may use
its market power to limit access to technical information needed
for free software developers to write drivers for the next
generation of hardware devices.
* DOJ needs to better understand how the free software movement
works, and to meet with developers and users from the free
software community.
II. DOJ should focus on barriers to entry faced by alternative
operating systems
We are writing to ask that the United States Department of Justice
(DOJ) antitrust authorities focus on barriers to entry faced by
alternative operating systems (OSs), including both proprietary
systems and those based upon free software.
According to persons who use alternative operating systems, or who
develop software to run on alternative operating systems, there are
several concerns which should be addressed by antitrust authorities.
One set of issues concerns "original equipment manufacture" (OEM)
distribution. Perhaps the most basic issue is to ensure that OEMs can
sell PCs with a non-Microsoft OS pre-installed without risking
retaliation from Microsoft. A related issue concern s the ability of
OEMs to sell personal computers which run more than one OS, including
one or more non-Microsoft OS, using readily available "boot manager"
software. At a minimum, Microsoft should be banned from signing
contracts with OEMs that require the OEM to charge consumers for
Windows software even if the consumer doesn't want the software and
won't use the software.
A second set of issues concerns access to technical information needed
to support drivers for devices supported by the OS. Computer users and
software developers are concerned that Microsoft may use its monopoly
power to limit access to technical information needed to write drivers
for the next generation of hardware devices.
Over the past several months we have received numerous messages from
consumers who want to buy computers to use with non-Microsoft
operating systems. They want the choice of purchasing a computer with
the following options:
1. a non-Microsoft operating system pre-installed,
2. a "dual boot" computer that can run Microsoft Windows or a
non-Microsoft operating system, where the user selects the OS at
the time the computer "boots," or
3. a "naked" computer, sold without any operating system, where the
users acquire and install the OS themselves.
On June 3, 1998, we published a survey of manufacturers of personal
computers. David Chun, a university student working with us, contacted
OEMs, identifying himself as an individual consumer. He asked if the
OEM would sell any model of personal computer with an alternative
operating system, or at least sell the system without Windows. (See
attachment A, or
http://www.essential.org/antitrust/ms/jun3survey.html). In each and
every case, the OEM sales personnel said that the purchase of
Microsoft Windows was required, even when the caller indicated that he
did not want to purchase Windows and would not be using Windows. When
OEMs were asked if it were possible to refuse to sign the Windows
license and return the Windows software, every OEM said the refund
would be zero. We conclude from this exercise and similar surveys we
have conducted, as well as from many calls from consumers, that the
1995 agreement concerning pre-processor licensing fees has been
ineffective in several practical areas, and that consumers who do not
want to use Microsoft Windows are paying a "tax" to Microsoft each
time they buy a nationally branded computer.
It is indeed incredible that in 1998, years after Microsoft signed a
consent degree on Windows licensing with DOJ, things have not changed
at all for consumers on the ground, raising fundamental questions
about the ability of Microsoft to induce OEM behavior which is
putatively prohibited by the consent degree. The 1995 agreement does
not insulate OEMs from pressure Microsoft can deploy with
discriminatory pricing of licenses for Windows or the core
applications included in the Microsoft Office suite.
We are also seeking guidance concerning the provisions in the 1995
consent agreement, as they relate to the OEMs installation of Windows
on dual boot PCs. Specifically, do OEMs have the unambiguous right to
sell PCs with Windows and a non-Micro soft OS on the same machine,
sharing the same hard drive?
As indicated earlier, commercial distributors of GNU/Linux have
approached a number of OEMs, to get a nationally branded PC shipped
with a pre-installed version of GNU/Linux, or as a dual boot machine
with both Windows and GNU/Linux installed. One leading Linux
distributor told us that OEMs are extremely reluctant to ship PCs with
pre-installed versions of Linux, for fear that the OEM will suffer
from discriminatory treatment by Microsoft. The extremely competitive
nature of the OEM business makes small price increases for Microsoft
Windows or Office licenses very significant for OEMs. We are concerned
that in the absence of non-discriminatory licensing for Windows or
Office products, Microsoft may exercise too much control over the
shipment of non-Microsoft products, including alternative operating
systems.
The issues concerning access to technical information and drivers for
the next generation of hardware devices are complex. Again, we are
concerned that Microsoft can use its market power to encourage
hardware vendors to develop products, such as the so-called
"win-modems" which only work with one operating system. If Microsoft
engineers the OS, including its new use of television spectrum, to
require secret and proprietary interfaces, it may provide a major
barrier to a new OS, which would not work with new hardware devices.
Our concerns on these issues are heightened by the fact that the U.S.
Congress is considering legislation which many believe will be unduly
restrictive concerning reverse engineering (
http://www.dfc.org/issues/wipo/wipoimpl.html), and there are similar
concerns regarding the proposed changes to Article 2B of the Uniform
Commercial Code. ( http://www.cptech.org/ucc/ucc.html)
III Technology makes entry by new operating systems practical.
There are several reasons why we believe consumers have an important
stake in the development and success of alternative operating systems,
and why this is even more true in 1998 than it was in 1995.
1. The Internet has made data itself much more portable, and it is no
longer important for consumers to share the same operating system
to share data.
2. Applications are much more portable than they were in the 1980s.
Software developers are now using modular development tools, such
as C++ or Java, which make ports to new OS platforms much less
costly than when developers used older languages, or assembly
language.
3. The economics of disk storage have radically changed. New PCs are
shipping with vast disk space, making it practical for consumers
to install more than one OS on the hard drive. For example, Dell
is now shipping desktop computers with hard drives as large as
16.8 gigabytes ( http://www.dell.com/products/dim/hdrive.htm).
Most alternative operating systems can easily be installed in
partitions of 1 gigabyte.
4. Competition among operating systems is a spur to innovation.
Microsoft Windows is a response to the Apple Macintosh, for
example.
5. User interfaces can be standardized across operating systems.
Microsoft Office works the same on a Macintosh and Windows 95.
WordPerfect and Netscape Communicator look and work the same on
Windows 95 and Linux.
Microsoft's hostility toward antitrust measures, and the repeated
failure of its management to abide by the letter or spirit of the
agreements they sign, raises serious doubts that Microsoft can ever be
expected to live up to the spirit of antitrust remedies which are
based upon conduct rules. Many consumers and software developers are
appalled at Microsoft's continued efforts to use the Windows OS as a
weapon against its competitors, and its repeated attacks on
non-proprietary Internet and computing standards, and are now
interested in considering alternatives.
We encourage and support the development of alternative operating
systems, including those which are based upon proprietary systems,
such as the highly regarded BeOS, which supports an impressive array
of new multimedia capabilities which clearly outperform Microsoft's
products in many areas, as well as other commercial OS ventures. Your
staff can find information on various commercial alternatives at web
sites like AltOS ( http://www.altos.org.uk/linksindex.html), OS News
(http://www.osnews.com/) or Convergence International (
http://www.convergence.eu.org/).
IV. The Free Software Movement is Important
It is also important for DOJ to recognize the importance of the free
software community. As you may know, there are many different
institutions and movements to develop free software, both for
operating systems and for applications, many of which run on different
OS platforms. These are serious software products. Yahoo, Inc, which
is valued at more than $5 billion, runs the largest web site on the
Internet on FreeBSD, a free Unix operating system, and Apache, which
is free server software. Indeed, Apache is a more widely used server
than anything sold by Microsoft.
There are many different models under which free software is
developed. Thousands of software programs are developed under the GNU
"copyleft" system, such as the highly rated GNU C++ compiler, and
Linux, a Unix like system that has an estimated user base of 7 to 10
million (See http://www.gnu.org, and http://www.linux.org). The
FreeBSD project is a non-copyleft Unix system that is in the public
domain (http://www.freebsd.org).
The Xfree86 project develops a powerful cross platform windowing
system that many prefer to Microsoft Windows (http://www.xfree86.org).
It is supported by contributions from dozens of technology firms
worldwide, including Compaq, S3, Trident, Number Nine, ATI, UUNET,
S.u.S.E., Tekelec Airtronic GmbH, Xtreme, and Yokogawa Electric
Corporation, to mention only a few.
The Apache server is developed by the Apache Project
(http://www.apache.org/). The popular software runs on Unix (different
flavors including FreeBSD, Linux, Solaris, e.t.c.) OS/2 and Microsoft
Windows. Although the product was only released in early 1995, by
January 1998, Apache was used on more than half the domains on the
Internet. (50.24% of the 1,834,710 sites,
http://www.apache.org/press/05Jan98.txt). Many of the developers of
Apache are IT professionals who support the Apache Project so they can
have a stable open source code alternative to proprietary systems,
such as Microsoft's NT server products. A similar effort supports
Perl, a popular programming language often used in Internet
applications (http://www.perl.org/).
There are countless combinations and permutations of these products
and systems. For example, you can download Linux over the Internet for
free, or you can purchase various "distributions" of the software from
commercial and non-commercial organizations (
http://www.linux.org/dist/index.html). Companies like Red Hat or
Caldera wrap various value added commercial products around GNU
copylefted elements of the distribution, as well as software products
which are distributed under the FreeBSD license, the Xfree86 license,
the Netscape general public license, or many other variations. You can
also buy commercial software, such as office productivity suites from
Corel, Applixware or StarOffice, or commercial server or network
products from Novell or Netscape, for example, which run on top of a
GNU/Linux or FreeBSD system.
What is astonishing is the sheer power and quality of many of the free
software products, and the way in which data users have successfully
launched products and entire operating systems that support demanding
mission critical tasks. It is also interesting to note that
Microsoft's predatory pricing practices, which have been often used to
destroy its commercial rivals, cannot be used as a weapon against free
software developers (although Microsoft can engage in other harmful
antitcompetitive actions, such as acts which discourage OEM sales of
PCs with a non-Microsoft OS pre-installed for users, or actions which
make it difficult or impossible for free software developers to obtain
technical information needed to write device drivers). We are also
mindful that large companies like IBM and Apple have shrunk from the
challenge of competing with Microsoft directly in the mass market for
operating systems.
Free operating systems like FreeBSD and Linux are evolving, and are
approaching something that can be used by a general consumer audience.
The Xfree86 windowing environment is an excellent graphical user
interface that many users already prefer to the Windows interface. One
area for improvement concerns better installation routines and broader
support for hardware devices. Indeed, much of the user interest in OEM
pre-installed distributions of Linux, for example, is based on
consumers wanting to avoid the initial setup, and be assured that the
Linux distribution will support the various hardware elements, such as
video cards or backup devices.
People in the free software community are concerned that Microsoft, or
its business associates, may create barriers to access to important
technical information needed for free software development,
particularly that information needed to write device drivers or better
installation routines. This is particularly important when the free
software products themselves typically do not generate income, and the
development is done by highly skilled and motivated volunteers, who
cannot afford even modest fees that are sometimes required to obtain
access to data. Also, free software products cannot be distributed if
authors are responsible for per distribution royalties of any kind.
We believe the modern free software movement is one of the most
impressive examples ever of consumers organizing to create
alternatives to high technology monopolies. It is a major change in
the way that complex software projects are organized, which could
become more revolutionary and perhaps more fundamental than the
changes associated with the Microsoft or Apple challenges to IBM.
We hope the present Administration will give weight and attention to
the concerns of the free software users and developers, a community
which lacks the public relations, lobbying and legal resources of
large firms. In this respect, we ask that DOJ meet with persons in the
free software development community to better appreciate the nature of
the free software movement, particularly as it relates to antitrust
issues, before DOJ becomes too committed to a particular course for
the current litigation or the eventual remedies addressed in
settlements.
Thank you for your consideration of these issues.
Sincerely,
/s/
Ralph Nader
/s/
James Love
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