Microsoft rivals blast 'toothless' deal

Competitors fear Windows XP will further extend Microsoft's dominance

Consumer groups and Microsoft's competitors have hit out at the US Justice Department (DoJ) for not coming down hard enough on the software giant.

It doesn't punish Microsoft for past behaviour, it just tells them to quit doing what they shouldn't be doing

James Love, US consumer champion

The final details of the anti-trust sanctions to be taken against Microsoft have yet to emerge after both parties agreed to settle out of court on Friday.

But the proposed DoJ settlement has already been branded 'toothless' and a 'sell-out' by the trade body representing some of Microsoft's biggest competitors.

It is clear the proposal will not deter Microsoft's illegal behaviour or prevent it from leveraging its operating system monopoly into markets for other products and services

Computer and Communications Industry Association

AOL Time Warner, whose Netscape product was at the heart of the US government's original court action against Microsoft, has said the proposed sanctions against the software giant would be too easily evaded.

While Sun Microsystems has said it does not think the proposed settlement goes far enough.

Consumer groups

Some competitors are considering suing for damages once the settlement has been finalised.

US consumer groups have also said the Microsoft settlement lacks 'bite'.

James Love, director of the Consumer Project on Technology, said: "It doesn't punish Microsoft for past behaviour, it just tells them to quit doing what they shouldn't be doing, which gave the company more money and gave it more dominance than it should have had."

Trade body's rebuke

The Computer and Communications Industry Association (CCIA), which represents Oracle, AOL and Sun Microsystems among, issued a stinging rebuke to the Justice Department's proposals as details began to emerge on Thursday.

"The current settlement proposals will do little to protect consumers, competition, entrepreneurs and innovation.

"It is clear the proposal will not deter Microsoft's illegal behaviour or prevent it from leveraging its operating system monopoly into markets for other products and services.

"For instance, with Windows XP Microsoft now intends to shift its monopoly to the internet," it said.

How settlement will work

The proposed settlement would allow PC makers to feature non-Microsoft software in the machines they sell.

It also opens up the inner workings of Microsoft's ubiquitous Windows software to competitors.

But the deal does not include the disclosure of the all-important Windows "source code".

This is the key to the Windows system and, as such, will continue to be jealously guarded by Microsoft.

No action on 'bundling'

The settlement also does nothing to stop Microsoft 'bundling' new features into its operating system, potentially blocking competitors from selling rival software.

Microsoft will have to place an "Add/Remove" icon on the screen to make it easier for consumers and computer makers to remove programmes included in the Windows system, such as Microsoft's internet browser.

The software giant would also have to ensure that its own programmes can be deleted, not merely hidden from view, without interfering with other software programmes.

This provision is intended to give computer makers more flexibility to decide which software to install on machines they sell.

For example, AOL Time Warner could pay a computer maker to substitute Netscape for Microsoft's browser on computers.

At the moment, computer makers would have to distribute both browsers because Microsoft has made it impossible to delete its own.