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SWEEPING AGREEMENT ENDS ANTITRUST LAWSUIT AND FORGES NEW TIES
Last week, Microsoft and Sun Microsystems announced that the two companies have entered into a broad technology collaboration agreement and have settled all pending litigation. “Our companies will continue to compete hard, but this agreement creates a new basis for cooperation that will benefit the customers of both companies,” said Microsoft CEO Steve Ballmer.
In this FINFlash Update, we also examine the aftermath of the European Commission (EC) ruling against Microsoft and the implications of Utah’s Spyware Control Act (H.B. 323). Similar legislation could soon be coming to your state. Finally, we encourage you to complete our brief online FIN survey to help ensure that the FIN continues to provide you with the information that you want.
SETTLEMENT OF SUN’S ANTITRUST LAWSUIT IN THE U.S
Last week’s announced agreement ends Sun’s antitrust lawsuit against Microsoft, which had been scheduled to go to trial in January 2006. Under the agreement, Microsoft and Sun will license each other’s technology in order to improve interoperability between the companies’ products. Microsoft will pay Sun $700 million as part of the antitrust and copyright settlement, as well as $900 million to resolve patent issues. Sun and Microsoft will also pay royalty fees for each other’s technology, with Microsoft making an up-front payment of $350 million.
Microsoft is allowed to continue to support Microsoft’s version of the Java virtual machine, and Sun is licensing Microsoft’s Communications Protocols to improve interoperability between Sun products and the Windows desktop. The two companies will also work together to ensure seamless computing as new Internet technologies emerge. These agreements will be a catalyst for the development of new products by both companies for the benefit of customers worldwide.
IMPACT OF SUN SETTLEMENT ON EUROPEAN ANTITRUST CASE
Sun has stated that the agreements announced last week satisfy the objectives it was pursuing in the EC actions pending against Microsoft. However, the European case is a separate matter, which is no longer about the original Sun complaint and will proceed. Microsoft will now appeal the EC ruling to Europe’s Court of First Instance, and seek a stay of the proposed sanctions, pending their appeal.
LEGISLATORS AND MEDIA VOICE CONCERNS ABOUT EUROPEAN RULING
Over the last few weeks, elected officials and the media have commented on the EC ruling against Microsoft. The New York Times wrote that the European plan to place “excessive restrictions on future additions to Windows…would…harm consumers.” The Chicago Tribune called on regulators to “negotiate a compromise with Microsoft.” And the Seattle Times wrote, “The problem with the European answer is that it is tailored too closely to the interests of the competitors who brought the complaint. It is the consumer's interest that government should seek.”
In Washington, DC, dozens of elected officials also commented on the ruling. Senate majority leader Bill Frist (R-TN) called the European demand to strip Media Player out of Windows “preposterous.” Senator Blanche Lincoln (D-AR) said, “The EU’s actions…are a significant step in the wrong direction.” And Representative Cal Dooley (D-CA) said, “The Commission’s ruling threatens to disrupt not only years of work by the Department of Justice and the courts, but could also have a profound, negative effect on the U.S. information technology industry.” To read other statements from elected officials, visit http://www.microsoft.com/freedomtoinnovate/eu/statements.
Look for updates from the FIN about Microsoft’s appeal of the EC ruling. The European Court of First Instance could rule as early as this summer on Microsoft’s request to stay the EC’s proposed remedies.
UTAH’S SPYWARE CONTROL ACT (H.B. 323) COULD DISRUPT THE INTERNET
Last month, Utah Governor Olene S. Walker signed into law the Spyware Control Act (H.B. 323), which is aimed at stopping software that secretly monitors a user’s Web surfing. This law has good intentions: to prevent Internet snooping and deceptive advertising practices. But it could have unintended consequences that hurt e-commerce and consumers. In seeking to prohibit intrusive spyware, the law also restricts technology that can help consumers, such as remote technical support, parental controls and automatic software updates. It also makes many types of e-commerce transactions and Web-based applications illegal. A broad cross-section of the technology industry -- including Amazon, AOL, eBay, Google, MCI, Microsoft, Novell, Oracle, Orbitz and Verizon -- have voiced concerns about this legislation.
YOUR STATE COULD BE NEXT FOR SIMILAR LEGISLATION
FIN members should be aware that legislation similar to Utah’s H.B. 323 could be coming to your state next. Congress may also consider legislation on this issue. While Microsoft believes that fraudulent and intrusive practices should be banned from the Internet, legislation should be carefully crafted so as not to bar the development and use of new Internet technologies that benefit consumers.
PLEASE TAKE THE FIN SURVEY!
We want to hear from you. By completing our short online survey, you can help us respond to your interests and policy concerns. It’s quick and easy. Just follow this link http://www.freetoinnovate.com/survey.
For the latest news about Microsoft and technology policy developments, visit the Freedom to Innovate Network at www.microsoft.com/freedomtoinnovate.
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