• Microsoft lost a major anti-trust case, and lost the appeal on all counts.
• Microsoft announced a few weeks ago that in keeping with the verdict they were ceding some control of the Windows XP desktop to the OEMs (computer builders). OEMs could now place icons of their choice on the desktop (but apparently not in the start menu). Previously the XP desktop was supposed to be clear of icons.
• AOL made a deal with Compaq to place an AOL icon on the desktop, and pay Compaq $35 for each AOL account sign-up it generates.
• Microsoft's President Steve Ballmer whined, "The stuff AOL is doing now is just limiting market choice - it's just egregious".
• Microsoft announced Monday 30-Jul-01 that any OEM who puts icons on the desktop must also put on an icon for MSN (Microsoft's service that competes with AOL). This puts AOL in the position of paying for Microsoft's advertising.
• Compaq stated that if Microsoft tells them to do this they will have no choice but to do it, because of Microsoft's monopoly power.

• [ Update: - 9-Aug-01 Microsoft has added that if any icons are placed on the desktop, not only MSN but also Microsoft Media Player icons must be placed there. VP Jim Allchin admitted Microsoft had witheld mention of these conditions in their public announcement, creating the false impression they were actually giving OEMs some freedom. (See additional update below)]

Analysis

IANAL (I am not a lawyer), but this looks like about as blatant a violation of monopoly power as I've ever seen - forcing a competitor to pay for the monopolist's advertising. If Microsoft goes through with this, it's certain to generate new anti-trust charges and/or greatly support the call for tough penalties in the current case.

I wouldn't be surprised if Microsoft's legal department forces a recall on this policy. I would, in fact, expect to see a flat out denial that their words ever meant what they say, because that's Microsoft's traditional style. If there is no recall, then you can be sure that Bill Gates and Steve Ballmer are making the legal decisions, and that means real trouble for the Redmond firm. Those two have no grasp of either law or ethics.

As for Steve Ballmer's complaints, gee Steve, it sure wasn't "egregious" and "limiting market choices" when you were doing it, was it? Let's all shed a tear for poor Mr. Balmer.

[ Update: - 9-Aug-01 Mr Allchin has stated that the MSN/MMP icon conditions had always been stated to the OEMs, just not in the public announcements (see update above). This statement by Mr. Ballmer is completely inconsistent with this statment, implying as it does that AOL was pulling a fast one on Microsoft. It looks as though someone is lying here. ]

In other news, the Department of Justice has indicated it's ready to play tough with Microsoft in court.

- Andrew Grygus

Links

• More AAx News Articles
• The Register - AOL-Time Warner first in there following MS step-down
• Wired - MS Amends Icon Concession
• Los Angeles Times, 31-Jul-01, business section - Microsoft to require MSN icon
• The Register - Microsoft attaches strings to XP desktop real estate giveaway
• Washington Post - Microsoft Position on MSN Icon Angers Competitors
• Washington Post - DOJ Lawyer ready to take on Microsoft