Microsoft on Truth Serum:
The Antitrust Settlement Line-by-Line
Part 1: The Definitions

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The recent antitrust settlement reached between the U.S. DOJ and convicted software monopolist Microsoft Corp. has enough loopholes to sew a circus tent. That would be bad enough if it was merely a toothless, self-cancelling document -- in legal terms, "a nullity." But far worse, this "settlement" document is actually a naked power grab. It actually grants to Microsoft extralegal powers beyond what it had at the beginning of the trial, tightening Microsoft's vise-grip on the software marketplace instead of loosening it. Most amazing of all, there is not one whiff of punishment for all the years of cheating that Microsoft has apparently gotten away with, nor a hint of an admission of guilt.

In an effort to clarify exactly how a monopolist reacts to the golden opportunity for absolute domination that this document presents, let us listen in on a simulated conversation between a neutral examiner and a high official of the convicted monopolist's inner circle under the influence of a safe, federally-approved truth-enhancing substance. (If you prefer, just imagine the convicted monopolist has merely had a few too many brewskies and is blabbering on like a blithering idiot while reading the court document.) Examiner's quotes (in
yellow) are taken verbatim from the settlement document as of November 2001.


EXAMINER: "Let us start with the definitions, shall we?"

MSFT: "Yes, of course. Words mean things, whatever we want them to mean."


A. "Application Programming Interfaces (APIs)" means the interfaces, including any associated
callback interfaces, that Microsoft Middleware running on a Windows Operating System
Product uses to call upon that Windows Operating System Product in order to obtain any
services from that Windows Operating System Product.

MSFT: "Right. APIs do not include anything that is a part of the Windows operating system itself. And they don't include anything that is part of the application programs, or the Internet. So to avoid government regulation of our APIs, we will make sure that there are no significant APIs in our Middleware. We will put the APIs (the ones that really mean anything) on other products besides Middleware.... like .NET. In other words, APIs which run on one operating system (.NET) and call a different operating system (on your PC, remotely via the Web) are exempt from regulation. <yawn>


B."Communications Protocol" means the set of rules for information exchange to accomplish
predefined tasks between a Windows Operating System Product on a client computer and
Windows 2000 Server or products marketed as its successors running on a server computer
and connected via a local area network or a wide area network. These rules govern the
format, semantics, timing, sequencing, and error control of messages exchanged over a
network. Communications Protocol shall not include protocols used to remotely administer
Windows 2000 Server and products marketed as its successors.

MSFT: "All our communication software will be embedded with code to administer Windows2000 Server and its successors. This code will be tightly integrated for security purposes, but will be disabled by default. So we will not have any Communications Protocols that can be regulated according to this definition." <gurgle>


C."Consideration" means any monetary payment or the provision of preferential licensing
terms; technical, marketing, and sales support; enabling programs; product information;
information about future plans; developer support; hardware or software certification or
approval; or permission to display trademarks, icons or logos.

MSFT: "Doesn't matter. We have a third party that can produce counter-marketing materials to embarass any potentially uncooperative lackey.... er, I mean, partner."


D."Covered OEMs" means the 20 OEMs with the highest worldwide volume of licenses of
Windows Operating System Products reported to Microsoft in Microsoft's fiscal year
preceding the effective date of the Final Judgment. The OEMs that fall within this definition
of Covered OEMs shall be recomputed by Microsoft as soon as practicable after the close of
each of Microsoft's fiscal years.

MSFT: "Does that mean licenses paid for, licenses actually delivered to customers, licenses committed to, or licenses actually registered by the enduser? Never mind, it can mean anything we want it to mean. So we create 20 shell companies, or sign up 20 idiots, and sign them up for 20 million licenses each, non-transferable. That lets us do whatever we want to the 20 'real' companies that actually sell that much hardware each year." <sigh>


E."Documentation" means all information regarding the identification and means of using APIs
that a person of ordinary skill in the art requires to make effective use of those APIs. Such
information shall be of the sort and to the level of specificity, precision and detail that
Microsoft customarily provides for APIs it documents in the Microsoft Developer Network

MSFT: "No person of merely ordinary skills has ever been able to make sense of our APIs. And besides, the key pieces of code and documentation are not always provided through MSDN; they may be delivered by private courier or secure datalink to those who agree to our unwritten terms." <hiccup>


F."IAP" means an Internet access provider that provides consumers with a connection to the
Internet, with or without its own proprietary content.

MSFT: "Hmmm, doesn't say anything about businesses, just consumers. So if we only make Internet access available through a shell company that resells the access to businesses that resell to consumers, then we can do anything we want." <sniffle>


G."ICP" means an Internet content provider that provides content to users of the Internet by
maintaining Web sites.

MSFT: "Yeah, whatever. If we only make Website maintenance available as a service through a shell company that charges content creators to display their content on the Web, then we can do anything we want." <gurgle>


H."IHV" means an independent hardware vendor that develops hardware to be included in or
used with a Personal Computer running a Windows Operating System Product.

MSFT: "Right, they're only 'independent' if they depend on us, but they're not an IHV if they only sell hardware with non-Microsoft operating systems. <giggle> This is almost too easy.... Unless we already 'own' them, we don't have to give them a thing. No information! No codes!" <snork>


I."ISV" means an entity other than Microsoft that is engaged in the development or marketing
of software products designed to run on a Windows Operating System Product.

MSFT: "Supercool. They're only an 'independent' if they depend on us. But they're not covered by this settlement if they only sell software for non-Microsoft operating systems.... So we don't have to give them a thing. They will never be able to make their non-Windows products interact with our Windows-only products." <smirk>


J."Microsoft Middleware" means software code that

1.Microsoft distributes separately from a Windows Operating System Product to update
that Windows Operating System Product; Trademarked;

3.provides the same or substantially similar functionality as a Microsoft Middleware
Product; and

4.includes at least the software code that controls most or all of the user interface
elements of that Microsoft Middleware.

Software code described as part of, and distributed separately to update, a Microsoft
Middleware Product shall not be deemed Microsoft Middleware unless identified as a new
major version of that Microsoft Middleware Product. A major version shall be identified by a
whole number or by a number with just a single digit to the right of the decimal point.

MSFT: "Yes, we had a version number for the product immediately following MS Word 2.0 for Windows. It was called MS Word 6.0 for Windows. And WindowsNT version 1.0 was marketed as "NT 3.1". We already did that. Oh, and we don't use version numbers any more, we use year numbers. Since our future Middleware has no version number, it is not regulated by this settlement." <giggle>


K."Microsoft Middleware Product" means

1.the functionality provided by Internet Explorer, Microsoft's Java Virtual Machine,
Windows Media Player, Windows Messenger, Outlook Express and their successors
in a Windows Operating System Product, and

2.for any functionality that is first licensed, distributed or sold by Microsoft after the
entry of this Final Judgment and that is part of any Windows Operating System

a.Internet browsers, email client software, networked audio/video client
software, instant messaging software or

b.functionality provided by Microsoft software that --, or in the year preceding the commercial release of any new
Windows Operating System Product was, distributed separately by
Microsoft (or by an entity acquired by Microsoft) from a Windows
Operating System Product; similar to the functionality provided by a Non-Microsoft Middleware
Product; and Trademarked.

Functionality that Microsoft describes or markets as being part of a Microsoft Middleware
Product (such as a service pack, upgrade, or bug fix for Internet Explorer), or that is a
version of a Microsoft Middleware Product (such as Internet Explorer 5.5), shall be
considered to be part of that Microsoft Middleware Product.

MSFT: "Hee hee. It's a 'middleware product' if it is embedded in the operating system.... But it's just 'middleware' if it is distributed separately. But if it is distributed by a Microsoft partner controlled 70% or 80% by Microsoft through stock ownership, then it's not 'middleware' because it is not distributed by Microsoft or a wholly owned subsidiary. Yee-haw. So we only have to deal with the regulation of "middleware products" embedded in the operating system. We'll deal with it." <belch>


L."Microsoft Platform Software" means (i) a Windows Operating System Product and/or (ii) a
Microsoft Middleware Product.

MSFT: "Right. If the key APIs are not in the Windows operating system and are not in any of the 'middleware product' class of embedded capabilities.... Well, like if we had somebody else distribute the APIs for us, as part of some package, and we controlled that company but did not own them. Yeah, cool. We ship the APIs as a standalone product through a third-party company, or sitting on a Web server somewhere in Idaho. But we don't have to divulge any details of the APIs because they wouldn't have a version number. They would be a standalone product, but without a version number, then they're not 'middleware,' so they are not covered by 'middleware' clauses. Since they are not part of Windows, they are not a 'middleware product.' Good to go." <aaghemm>


M."Non-Microsoft Middleware" means a non-Microsoft software product running on a Windows
Operating System Product that exposes a range of functionality to ISVs through published
APIs, and that could, if ported to or made interoperable with, a non-Microsoft Operating
System, thereby make it easier for applications that rely in whole or in part on the
functionality supplied by that software product to be ported to or run on that non-Microsoft
Operating System.

MSFT: "Sure, like we wouldn't give away free copies of comparable 'Microsoft middleware' to put them out of business. Except that it's not 'Microsoft middleware' if it has no version number, so it would not be regulated by this settlement. And since we don't use version numbers any more, just years...." <yawn>


N."Non-Microsoft Middleware Product" means a non-Microsoft software product running on a
Windows Operating System Product (i) that exposes a range of functionality to ISVs through
published APIs, and that could, if ported to or made interoperable with, a non-Microsoft
Operating System, thereby make it easier for applications that rely in whole or in part on the
functionality supplied by that software product to be ported to or run on that non-Microsoft
Operating System, and (ii) of which at least one million copies were distributed in the United
States within the previous year.

MSFT: "Okay, so if it's Microsoft, then it's 'middleware' if it's standalone, and a 'middleware product' if it's part of Windows. But if it's not Microsoft, then it's 'middleware' if it's standalone, and a 'middleware product' if a million copies were distributed in the U.S. in the last year. So giving away a million copies of something is equivalent to integrating it with Windows? Fine, I like those odds!"


O."OEM" means an original equipment manufacturer of Personal Computers that is a licensee
of a Windows Operating System Product.

MSFT: "Like I said before, if we don't already control them, we don't have to call them an OEM. If they sell only non-Microsoft operating systems, we don't have to cooperate with them at all." <snergle>


P."Operating System" means the software code that, inter alia, (i) controls the allocation and
usage of hardware resources (such as the microprocessor and various peripheral devices) of
a Personal Computer, (ii) provides a platform for developing applications by exposing
functionality to ISVs through APIs, and (iii) supplies a user interface that enables users to
access functionality of the operating system and in which they can run applications.

MSFT: "Mighty generous, that definition. If we ship the APIs separately -- er, like, on the Web -- then that says that Windows is not even an operating system! No regulation! Man, we sure get good value for our legal dollar." <smirk>


Q."Personal Computer" means any computer configured so that its primary purpose is for use
by one person at a time, that uses a video display and keyboard (whether or not that video
display and keyboard is included) and that contains an Intel x86 compatible (or successor)
microprocessor. Servers, television set top boxes, handheld computers, game consoles,
telephones, pagers, and personal digital assistants are examples of products that are not
Personal Computers within the meaning of this definition.

MSFT: "Right, they let us extend our monopoly into game boxes, tv, servers, handhelds, phones, PDAs, whatever. We could even sell NT-based stuff on Alpha or PPC or whatever, and it wouldn't be covered by this settlement. Case closed!" <sniffle>


R."Timely Manner" means at the time Microsoft first releases a beta test version of a Windows
Operating System Product that is distributed to 150,000 or more beta testers.

MSFT: "Didn't they tell you? We don't beta test with more than 148,000 testers per version."


S."Top-Level Window" means a window displayed by a Windows Operating System Product
that (a) has its own window controls, such as move, resize, close, minimize, and maximize,
(b) can contain sub-windows, and (c) contains user interface elements under the control of at
least one independent process.

MSFT: "Right. Windows is GUI and GUI is Windows. Next definition."


T."Trademarked" means distributed in commerce and identified as distributed by a name other
than Microsoft  or Windows  that Microsoft has claimed as a trademark or service mark by
(i) marking the name with trademark notices, such as, or, in connection with a product
distributed in the United States; (ii) filing an application for trademark protection for the name
in the United States Patent and Trademark Office; or (iii) asserting the name as a trademark
in the United States in a demand letter or lawsuit. Any product distributed under descriptive
or generic terms or a name comprised of the Microsoft  or Windows  trademarks together
with descriptive or generic terms shall not be Trademarked as that term is used in this Final
Judgment. Microsoft hereby disclaims any trademark rights in such descriptive or generic
terms apart from the Microsoft  or Windows  trademarks, and hereby abandons any such
rights that it may acquire in the future.

MSFT: "Silly. What we call it doesn't matter. It's where the APIs are that matters. Oh, and that boot sector. Sshshshhh, don't tell anybody.... as long as we own the boot sector, we RULE!" <snort>


U."Windows Operating System Product" means the software code (as opposed to source code)
distributed commercially by Microsoft for use with Personal Computers as Windows 2000
Professional, Windows XP Home, Windows XP Professional, and successors to the
foregoing, including the Personal Computer versions of the products currently code named
"Longhorn" and "Blackcomb" and their successors, including upgrades, bug fixes, service
packs, etc. The software code that comprises a Windows Operating System Product shall be
determined by Microsoft in its sole discretion.

MSFT: "Ha! Doesn't even cover DOS-based stuff. We can keep spreading that stuff around any way we want, it's not covered by this settlement. Oh, and that last sentence.... Worth a hundred billion dollars if it's worth a penny! If we say it's not Windows, it's not Windows! If we say it's not an operating system, it's not an operating system. YESS!! All the other definitions are now meaningless. Just give me that last sentence!" <sigh>


Truly, to attempt to regulate a software company using predefined legalisms is like trying to grab an eel with one hand. Slippery, slick, and subtle, Microsoft has cleverly inserted enough "weasel-words" and trapdoors in this settlement to build several alternative escape scenarios. The slickest part of all is to put the definitions at the end of the document, where they legally overrule all that comes before, and to place the loosest definition of all at the very end of the document, slyly positioned to trump any preceding malarkey.

That last sentence ostensibly was inserted to protect Microsoft from having to ship code that it did not choose to -- so that Microsoft would not have to put its moniker on a product containing a rival company's code (such as Java or Netscape, for example). But its meaning is a classic double-edged sword. Microsoft will happily invert it to state that any product which Microsoft deems as a non-operating system -- including its own products, like Windows -- are legally barred from court action, because Microsoft is given the sole discretion as to what is an operating system and what is not. If Microsoft says "this code that we sell as Microsoft Windows is not a Windows Operating System Product," then no court can argue otherwise, because the last sentence states that Microsoft has "sole discretion" as to what it will allow to fall into that legal category known as Windows Operating System Products. This is because, since that sentence comes at the end of the document and at the end of the definitions, it legally trumps all that came before it.

If Microsoft chooses to push the envelope a bit, they can even claim that a competitor's product is a Windows Operating System Product, because the last sentence says that the court grants Microsoft the "sole discretion" -- taking that discretion not only out of the hands of the courts, but out of the hands of competing companies as well. That discretion covers "the software code" -- not just "the Microsoft software code" -- that Microsoft chooses. These clauses grant Microsoft the extralegal power to overrule federal trade and copyright offices, as well as any court below the Supreme Court level. And it matters not what the document "meant" to say; it only matters what it "does" say. It "does" say that no matter what a competitor creates via innovation or discovery, Microsoft can decide to take it and make it part of Windows. This is a license to hoist the Jolly Roger and sail the seven seas, pirating any rival code that Microsoft chooses, "in its sole discretion."

That's where Microsoft's lawyers always have an advantage over the legal representatives of governmental entities. Since Microsoft knows what it wants to say, and knows a thousand different ways to say it, they only have to find ONE way to say it that the government does not recognize as outrageously advantageous to Microsoft. It is to Microsoft's advantage that these decisions are made at the highest levels of the legal system, because the farther one moves up the legal ladder, the more the judges understand law, and the less they understand technology. That has been Microsoft's trump card all along.


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Copyright © 2001, Tom Nadeau.
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