The Department of Justice on Friday published details of the proposed settlement of its dispute with Microsoft. The highlights of the proposal follow, and the full text is obtainable by following the link lower down the page on the right.

Today's proposed settlement is modeled on the conduct provisions in the original Final Judgment entered by Judge Jackson, but includes key additions and modifications that take into account the current and anticipated changes in the computer industry, including the launch of Microsoft's new Windows XP operating system, and the Court of Appeals decision revising some of the original liability findings.

The proposed Final Judgment includes the following key provisions:

• Broad Scope of Middleware Products - The proposed Final Judgment applies a broad definition of middleware products which is wide ranging and will cover all the technologies that have the potential to be middleware threats to Microsoft's operating system monopoly. It includes browser, e-mail clients, media players, instant messaging software, and future new middleware developments.
• Disclosure of Middleware Interfaces - Microsoft will be required to provide software developers with the interfaces used by Microsoft's middleware to interoperate with the operating system. This will allow developers to create competing products that will emulate Microsoft's integrated functions.
• Disclosure of Server Protocols - The Final Judgment also ensures that other non-Microsoft server software can interoperate with Windows on a PC the same way that Microsoft servers do. This is important because it ensures that Microsoft cannot use its PC operating system monopoly to restrict competition among servers. Server support applications, like middleware, could threaten Microsoft's monopoly.
• Freedom to Install Middleware Software - Computer manufacturers and consumers will be free to substitute competing middleware software on Microsoft's operating system.
• Ban on Retaliation - Microsoft will be prohibited from retaliating against computer manufacturers or software developers for supporting or developing certain competing software. This provision will ensure that computer manufacturers and software developers are able to take full advantage of the options granted to them under the proposed Final Judgment without fear of reprisal.
• Uniform Licensing Terms - Microsoft will be required to license its operating system to key computer manufacturers on uniform terms for five years. This will further strengthen the ban on retaliation.
• Ban on Exclusive Agreements - Microsoft will be prohibited from entering into agreements requiring the exclusive support or development of certain Microsoft software. This will allow software developers and computer manufacturers to contract with Microsoft and still support and develop rival middleware products.

The proposed Final Judgment also includes key additional provisions related to enforcement:

• Licensing of Intellectual Property - Microsoft also will be required to license any intellectual property to computer manufacturers and software developers necessary for them to exercise their rights under the proposed Final Judgment, including for example, using the middleware protocols disclosed by Microsoft to interoperate with the operating system. This enforcement measure will ensure that intellectual property rights do not interfere with the rights and obligations under the proposed Final Judgment.
• On-Site Enforcement Monitors - The proposed settlement also adds an important enforcement provision that provides for a panel of three independent, on-site, full-time computer experts to assist in enforcing the proposed Final Judgment. These experts will have full access to all of Microsoft's books, records, systems, and personnel, including source code, and will help resolve disputes about Microsoft's compliance with the disclosure provisions in the Final Judgment.

Illegal conduct

The core allegation in the lawsuit, upheld by the Court of Appeals in June 2001, was that Microsoft had unlawfully maintained its monopoly in computer-based operating systems by excluding competing software products known as middleware that posed a nascent threat to the Windows operating system.

Specifically, the Court of Appeals found that Microsoft engaged in unlawful exclusionary conduct by using contractual provisions to prohibit computer manufacturers from supporting competing middleware products on Microsoft's operating system by:

• prohibiting consumers and computer manufacturers from removing Microsoft's middleware products from the operating system

• reaching agreements with software developers and third parties to exclude or disadvantage competing middleware products.

The proposed Final Judgment will be published by the Federal Register, along with the Department's Competitive Impact Statement, as required by the Antitrust Procedures and Penalties Act.

Renata Hesse, Trial Attorney, 325 7th Street, N.W., Suite 500, Washington, DC 20530

Address for comments on Microsoft settlement

Any person may submit written comments concerning the proposed consent decree within 60 days of its publication to: Renata Hesse, Trial Attorney, 325 7th Street, N.W., Suite 500, Washington, DC 20530.

At the conclusion of the 60-day comment period, the Court may enter the proposed consent decree upon a finding that it serves the public interest.

The proposed Final Judgment will be in effect for a five-year period and may be extended for an additional two-year period if the Court finds that Microsoft has engaged in multiple violations of the proposed Final Judgment.

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