Superior Linux Technology not Stopping Microsoft - Time to Call Uncle Sam

LXer Day Desk: 12-14-2005 Back when the Communists ran the Soviet Union, truth never reached the outside world. Within the big computer manufacturers, media relations people have gestapo like power. Want to keep your job? Never let them find you quoted in the newspaper, especially about Microsoft. But today, the time has come for you to find out what lurks behind the corporate veil, particularly when it comes to the subject of Microsoft and Linux. President Bush open this gate! Mr. Bush, tear down this wall! Related Article: Congress: Clear the Air about Microsoft, Apple and Linux

For approximately twenty years, people at International Business Corp lived in a house divided. Few even knew. Like many large corporations IBM employs a remarkable media relations group. They not only provide lots of information about IBM to the outside world and make executives available to the press, they also censor the information going out. They craft the image of IBM.

Inside IBM, media relations is everyone and no one. They are the gatekeepers. They are guarding all the doors. They are holding all the keys, which means you cannot fight them. So, no one ever tries. To a Linux advocate, IBM presents a web of confusion.

Few people know that a subsidiary of the IBM Corporation located in Raleigh, NC and a division within the company spent approximately twenty years locked in mortal combat. That combat affected Linux over the last few years. It actually slowed Linux progress.

The IBM PC Company and the IBM Personal Software Products division had this in common: They both sent their profits to Armonk, and if no profits existed, Armonk decreed the firings. The PC Company doomed OS/2, for example. They refused to pre-install OS/2 instead of Microsoft Windows on the company's consumer products.

So if you ever wondered why IBM presented a confusing face with regard to the PC world, now you have it. The Division wanted to bring you products like OS/2, Lotus Smart Suite and something that may sound familiar: Workspace on Demand. But, the PC Company only wanted to sell Microsoft products. Few would consider that a formula for success.

Now, Linux

Imagine if IBM couldn't control their own strategies when it came to PC operating systems, how could they or any other PC manufacturer bring you Linux? Microsoft's tenacles reach in and around many people within the PC world to the extent they represent a pandemic. To extricate them, requires government intervention.

The government has tried before. You can go back to when OS/2 was the top selling operating system in world. But wait, you didn't know that? Well then, let's open some eyes.

The Who Dunnit of Windows

Have you ever wondered about major media's love affair with Microsoft? Start with PC Magazine. PC Magazine used to print a software sales chart in each issue showing the bestselling programs. For many months, Windows topped its list until the autumn of 1994.

In the autumn of 1994, the best seller was OS/2 Warp 3. For the first time, the magazine did not publish their famous chart. Editors claimed they ran out of space during the two months that OS/2 topped the charts. Of course, this was just an unfortunate incident.

As you know, PC Magazine's failure to publish OS/2's win only began to demonstrate the media's favortism with Windows. We can go through thousands of articles praising Microsoft and condeming everyone else up to and including Iain Ferguson's infamous report on "flaming Linux bigots" article. You will find only a few industry magazines that fail to comment about the so-called fanaticism of non-Microsoft users. Magazines will dismiss us as crackpot zealots of Linux. They even dismissed the users of OS/2 who voted it InfoWorld's product of the year for four consecutive years.

And the US Government?

We can start with the US Justice Department's antitrust investigation of Microsoft in the spring of 1994. Everyone believed DoJ would sue. But Bill Gates made a visit to the White House that spring. A month later Justice and Microsoft announced a consent decree without Microsoft admitting any wrongdoing.

Shortly after the consent degree, the U.S. District Judge for the District of Columbia began hearings into the settlement. The judge was formerly chief of enforcement at the Securities and Exchange Commission. Justice wanted him to sign off on the agreement.

The judge objected to many Microsoft practices such as OEM selling PCs with competitive operating systems installed and still having to pay Microsoft. He had problems with Microsoft's nondisclosure agreements mentioned in the consent agreement. He had problems with Justice declining to disclose any meaningful information concerning the substance its investigation.

The judge found it odd that Justice initiated a massive antitrust probe, found significant violations in the large market and only wrote a complaint alleging minor anticompetitive practices.

He felt the decree didn't work in the public interest because: 1) It declined to provide the Court with the information it needed to make a proper determination. 2) The scope of the decree was too narrow. 3) The parties did not address other anticompetitive practices. 4) The Court was not satisfied that enforcement and compliance mechanisms were satisfactory.

What About Today

If one looks at the situation in Massachusetts, where the Governor approved a move to a new document standard we see Microsoft repeating behavior the District Court found anti-competitive ten years ago. Here's what the judge wrote:

"This Court cannot ignore the obvious. Here is the dominant firm in the software industry admitting it `preannounces' products to freeze the current software market and thereby defeat the marketing plans of competitors that have products ready for market. Microsoft admits that the preannouncement is solely for the purpose of having an adverse impact on a competitor's product. Its counsel states it has advised its client that the practice is perfectly legal and it may continue the practice. This practice of an alleged monopolist would seem to contribute to the acquisition, maintenance, or exercise of market share. . . . February 14, 1995

One has to ask if Microsoft's announcement of their Open Office XML strategy to create an international standard seems like history repeating itself. Microsoft essentially put the clamps down on Massachusetts' adoption of the Open Document Format with their announcement. Was this done solely for the purpose of having an adverse impact on a competitor's product?

What Happened to the Court's Finding in 1995?

The judge wrote: "It is clear to this Court that if it signs the decree presented to it, the message will be that Microsoft is so powerful that neither the market nor the Government is capable of dealing with all of its monopolistic practices. The attitude of Microsoft confirms these observations."

Microsoft and Justice filed a joint appeal. The following June, a federal appeals court ruled that the judge had overstepped his authority and assigned the case to a different judge, Thomas Penfield Jackson. The Department of Justice then engaged in United States v. Microsoft. (But only after a Microsoft employee supposedly leaked copies of the OEM agreements to the press and then went into hiding.)

How Come We're Still Here?

In the original hearing of 1995, the judge pointed out that "Microsoft can hold onto its market share gained allegedly illegally, even with the introduction of a competitor's operating system superior to its own. By telling the public, `we have developed a product that we are about to introduce into the market (when such is not the case) that is just as good and is compatible with all your old applications,' Microsoft can discourage consumers and OEMs from considering switching to the new product."

Only three years before, people in the computer press laughed at early versions of Windows. Regardless, those versions provided a graphical user interface, supported a mouse, and worked. Companies wanted to produce graphics programs that did nothing but provide a graphical front end for DOS. Some of those programs provided nothing more than a menu. Microsoft saw the need and offered a "runtime" version of Windows.

Many companies purchased scaled-down Windows. It started when the graphics program started, provided graphical, printer, and mouse services, and shut down when the graphics program did. Many companies built front-ends to Windows.

Microsoft also wrote a graphical front-end and came out with Windows 3.0. Programs written for other front-ends also ran on Windows 3.0. It was an effective way of encouraging software developers to write for the Windows API. I remember registering my run-time version of Windows and DOS and receving a special offer in the mail from Microsoft for Windows 3.0. The price seemed like a pittance and I wanted to try it.

Prior to June 1992, people who bought IBM PCs got them empty. They came with some version of DOS and maybe a few low-quality applications. I bought one of those and installed Aldus Pagemaker on it. The user formated the hard drive, installed DOS, and any other programs that came with the computer.

In June 1992, Microsoft began its preload campaign. Microsoft saw a market that knew little about computers. They felt consumers would buy a plug it in and turn it on system. Computer manufacturers experienced massive increases in sales and from that point it became impossible to buy a PC without Windows.

Bill Gates promoted the fact that they had sold millions of computers with Windows to independent software vendors (ISVs). He assured the trade that Microsoft would not cross the green line and compete with those ISVs. One of my associates had the top selling "contact manager solution" running on Windows. Then, when Microsoft released Outlook, his business died overnight.

Time to Go Back to the Future

While we can see the power of preloading an operating system today, we didn't think much about it in 1992. Today, 95% of the people who own computers use what comes on their PCs.

Preload agreements seemed like a clever marketing tool. In the least they gave someone an edge. At the other end of the spectrum under the Sherman and Clayton acts they should be potentially felonious.

Back when these agreements started, preloads gave OEM's a good price on DOS. But OEMs had to agree to buy Windows, too. They would have to pay for DOS and Windows for every computer they shipped, whether DOS and Windows were on it or not. We don't know what agreements exist today because disclosure goes beyond the scope of the US Government's enforcement of their agreement with Microsoft. Everything is done in secret without public disclosure.

Not much has changed since Microsoft started selling preload software. Today, we cannot know if people would still buy Microsoft products because the Government protects the monopoly. What percentage of the market would Microsoft have in a fair market?

The only way we can answer that last question is to stop manufacturers from preloading Windows. Until then, we do not have a free market. Microsoft has no way to prove itself otherwise.

Prayer for Relief

In an article entitled U.S. Wades Into Korea's Microsoft Controversy Chosun.com states:

The U.S. Justice Department on Wednesday took the unusual step of sharply criticizing a decision by Korea’s Fair Trade Commission to fine Microsoft W33 billion (US$33 million) in an antitrust case, which it said went “beyond what is necessary or appropriate.”



(It went on to say)



FTC director-general Kim Byung Bae said it was rare for the U.S. Justice Department to issue a statement on the matter since it was customary to respect decisions by partnering institutions. That was why the Korean government made no comment on a recent decision by the department to fine Samsung Electronics for price-fixing, Kim said. Asked if the U.S. statement could lead to a full-scale trade war, Kim said the FTC decision was based solely on whether Microsoft violated antitrust law or not, so it was not a trade issue.

Since the US Government has effectively lost sight of the tenants of the Sherman and Clayton Anti-Trust Acts and has gone so far as to interfere with another country's findings related to anti-trust, it must re-evalauate its role with Microsoft. We ask the US Administrative branch to cease and desist from lobbying on behalf of Microsoft. We do not feel that the federal government should use the taxpayers money to persuade other nations to see it Microsoft's way.

We ask the US Congress to evaluate the administration's role with regard to Microsoft. We ask that Congress take up the issue of Microsoft's potential restraint of trade. We ask that Microsoft be prevented from continuing or entering into preloading agreements.

We ask for a comprehensive review of Microsoft's political activities. Has Microsoft used shills and alter-egos to contribute to campaigns in an attempt to influence rulings in its favor? What part has Microsoft played in Government on the state, local and Federal levels? We believe it is the duty of the US Government to inform the people.

Finally, we ask that all OEM manufacturers disclose their policies with regard to selling Microsoft products. We feel that such disclosures should be included in companies' SEC filings. We also believe that separate schedules of payments to and from Microsoft and OEMs be disclosed immediately.

Closing Remarks

Do you wonder how a software manufacturer like Microsoft could get so fat? I do and I wonder why others do not. It seems like common sense to me that a software firm that sells the same programs over and over shouldn't produce the richest men in the world.

Microsoft hasn't offered a new operating system since Windows XP and that's going on five years. They keep promising a new one. It's not like they don't have competitors with products of equal quality. In fact, many of their competitors give their software away for free.

Remember what the Judge said in 1995:

"This Court cannot ignore the obvious. Here is the dominant firm in the software industry admitting it `preannounces' products to freeze the current software market and thereby defeat the marketing plans of competitors that have products ready for market. Microsoft admits that the preannouncement is solely for the purpose of having an adverse impact on a competitor's product. Its counsel states it has advised its client that the practice is perfectly legal and it may continue the practice. This practice of an alleged monopolist would seem to contribute to the acquisition, maintenance, or exercise of market share. . . . "