Washington | Tuesday
THE Microsoft antitrust settlement was criticised in comments submitted to a federal judge, with two prominent economists contending the agreement fails to restore competition as pledged.
The comments came ahead of Monday’s deadline set by Judge Colleen Kollar-Kotelly as she prepared to rule on whether to accept the agreement endorsed by the Justice Department and nine of the states that were part of the antitrust case.
Nobel prize winning economist Joseph Stiglitz said in a brief filed on Friday that the proposed settlement, in which Microsoft agrees to modify certain business practices, ”is critically deficient.”
”The overall aims of the (settlement) are laudable – to increase competition and reduce Microsoft’s ability to maintain its monopoly at the expense of consumers,” Stiglitz said in a study commissioned by the Computer and Communications Industry Association, allied with Microsoft rivals.
”But the (settlement) will not succeed in achieving these goals. It does not change any of the incentives faced by Microsoft to undertake anticompetitive actions.”
A separate affidavit by Kenneth Arrow, a Stanford economist and 1972 Nobel laureate, contends the agreement will stifle competition from other software developers.
Arrow, who included his statement in a brief filed by the trade group ProComp, which has been highly critical of Microsoft, said Microsoft’s ”monopoly power in PC operating systems is more entrenched than it was in the mid-1990s” and that it is now ”exceedingly difficult” to establish strong competition to Microsoft.
Arrow said the settlement ”is missing forward-looking remedies that address such efforts by Microsoft to protect and enhance its existing market power by using its illegally maintained monopoly in PC operating systems to defeat competitive threats in adjacent markets.”
Microsoft, found to have abused its monopoly position in PC operating systems, settled its antitrust case with the federal government last year in exchange for a pledge to modify some business practices.
But nine other states as well as the District of Columbia have rejected the accord and are pressing for tougher sanctions.
Hearings on that track are set to begin March 11.
The Association for Competitive Technology, another high-tech group more closely allied with Microsoft meanwhile filed comments endorsing the agreement and claiming that opposition is fuelled by Microsoft competitors like Sun Microsystems and America Online.
”For the good of the industry, consumers and the economy, the Association for Competitive Technology and its members support the Revised Proposed Final Judgment,” said ACT president Jonathan Zuck.
”Not only does the settlement protect consumers and competition, it also meets the all the requirements of a remedies under antitrust law: it protects consumers, fits the illegal conduct, minimises collateral damage and is easily administered.”
ACT’s brief was endorsed by former attorneys general Griffin Bell and Edwin Meese and former White House counsel C. Boyden Gray.
Zuck contended that ”those left fighting this settlement are waging their war on behalf of a few billionaires, not the industry and certainly not for consumers …They started out talking about ‘minor tweaks,’ but emerged from smoke-filled rooms with AOL and Suns wish list instead.” – Sapa-AFP