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Consumer coalition challenges Microsoft

As the Microsoft anti-trust trial heads for the penalty phase, a coalition of consumer groups want federal prosecutors to play hardball. In a letter sent last week to federal and state officials connected with the case, the Consumer Federation of America, Consumers Union, Media Access Project and the U.S. Public Research Interest Group together called for severe measures to curb what they call the company's historic pattern of anti-competitive behavior.

"Without severe penalties for failing to comply with the consent decree," the letter reads in part, "Microsoft—as evidenced by past behavior—has no incentive to obey the law. Financial penalties for noncompliance should be sufficiently large as to be meaningful to a company with billions of dollars of cash on hand garnered through abuse of monopoly power," the groups wrote. "Break-up should be a continual threat available to the Court should it determine that Microsoft fails to comply with the conduct remedy."

The letter concludes, "We urge the attorneys general, who represent consumers as plaintiffs in the case, to seek a swift and sure end to what we believe to be illegal leveraging of illegally obtained monopolies for the PC operating system and Internet browser."

The group also issued a report spelling out its concerns about the Redmond, WA-based software maker's upcoming Windows XP operating system. In the 33-page report, the coalition said that XP "advances the company's illegal anti-competitive practices and harms the nation's consumers."

According to the report: "Activities such as communications, commerce, streaming audio-video applications, and online services are, at the present, vigorously competitive. These essential areas of the 21st century economy will be threatened and consumers harmed if Windows XP and its tightly bundled version of Internet software hits shelves as planned."

The report also detailed the group's concerns about Microsoft's Passport service of linked Web sites. The service allows Microsoft to collect credit card numbers, transaction and Internet usage data, nicknames, address books, calendars and Web site bookmarks. The depth of data Microsoft will have access to, the report said, poses serious risks to consumers.

The coalition's report was written by Mark Cooper of the Consumer Federation of America and Christopher Murray of the Consumers Union. Media Access Project and the U.S. Public Interest Research Group also signed the report.

At press time, Microsoft had not responded to requests for comment, but company representatives said that a response was forthcoming.

For more E-Business, go to: http://www.adtmag.com/section.asp?section=specialreport.

About the Author

John K. Waters is a freelance writer based in Silicon Valley. He can be reached at john@watersworks.com.

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