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Nader slams MS pricing, licences, demands Office ports

Just another day in a life of consumer advocacy...

Ralph Nader, the consumer advocate who brought General Motors to its knees over car safety failures ("Unsafe at any speed"), has been talking and writing about Microsoft's "poorly designed products" that were "prone to crash" at the Bazaar, an open source software event in New York. He drew attention to the narrowness of the DoJ case, which ignored "a plethora of issues" relating to the desktop monopoly, MS Office, and licensing issues. Nader has previously arranged two conferences on Microsoft which focussed public attention on the company. Nader is much admired by Microsoft president Steve Ballmer's mother, who was concerned that her son was doing something that was criticised by her hero. Nader's first concern was pricing, where Microsoft had increased OEM prices and charges more than three times the price of BeOS. He also brought up the restrictions in Microsoft's end user licence agreements (EULAs) which often don't allow Microsoft products to be sold or transferred to another PC. Those who prefer Linux often find they had to pay for Windows, even if they did not require it. It is worth noting that Nader's organisation does practice what it preaches in that it uses Linux in its offices. Jay Sulzberger of LXNY announced at the meeting that there would be a Windows Refund Day organised in New York, and since Microsoft had been unresponsive, they were going to court about Microsoft's failure to abide by the terms of its EULA, which state that "If you do not agree to the terms of the EULA..." the PC manufacturer (for OEM versions) or the dealer (for a retail version), would provide "a refund". Those who have tried have found obstacles like tank traps and minefields along the road to the promised refund. Even if the user does not want Windows (or other bundled software), the OEM usually has to purchase the licence from Microsoft anyway, Nader noted. Another issue concerns the number of copies of Windows that consumers are liable to purchase, and the upgrade fees to keep it working in the face of deliberate tricks used by Microsoft to keep users having to buy more. Nader also drew attention to the monopoly position of MS Office, although he didn't mention that the States had revised their Complaint in the joint case against Microsoft by removing claims about Office monopolisation, presumably because the DoJ did not want the combined case to be too long. So far as non-pricing issues were concerned, Nader was concerned about the constant crashing of Microsoft products, and the apparent disabling of dozens of third-party multimedia programs. He also noted how Microsoft had decided to make the running on any non-Microsoft browser "a jolting experience". The "forced migration to Microsoft's Johnny-come-lately imitations" harms consumers and lowers profitability. He concluded his talk to the hackers and ageing automobile-safety activists by commenting: "We recognise that in software markets, there may be cases where the market coalesces around a single product with a large market share. But it is one thing for that decision to be made on the basis of competition for consumer satisfaction, based upon product quality and price, and something else when consumers are forced to pick Microsoft, by an endless array of underhanded, coercive and non-meritorious tactics. Consumers are harmed when there is no real choice, except to succumb to the Microsoft Borg." Nader also wrote an article for Legal Times with his associate James Love, who directs the Consumer Project on Technology and who also happens to be a cousin of Ransom Love, president of Caldera. His theme was that the debate about Microsoft should be wider than the narrow confines of the antitrust bar, with a public debate to ensure greater competition and consumer choice. It was refreshing to find some plain speaking about Microsoft's business ethics: "Microsoft can't be trusted. The past six years have demonstrated that Microsoft cannot be trusted, and one should not predict that Microsoft will carry out any settlement in good faith. The company's conduct during the trial itself was the best evidence. "When the judge ordered Microsoft to offer OEMs a version of Windows that did not include the company's Internet Explorer browser, Microsoft served up an outdated 1995 version of Windows that wouldn't even work with modern PC hardware. If Microsoft was willing to insult a federal judge in the middle of an antitrust proceeding, it's likely to be pretty bold after it enters into a consent degree." Nader and Love have four remedies in mind for Microsoft. The first is to reform OEM licensing by means of non-discriminatory licensing of Windows for OEMs, and they would also like changes to MS Office licensing too so that the product cannot be tuned to embed proprietary technology into Web documents. This of course implies a published price list. Breaking up Microsoft is favoured as their second remedy because of Microsoft's determination to resist any imposed change, with IE being a separate divestiture to make possible competition in the browser market. The third remedy is to fix compatibility problems, although making the Windows code available publicly would not go far enough they suggest. Love has previously argued for the kind of remedy that was used by the EU from 1984 against IBM, following the collapse of the US case under the Reagan regime. IBM was found guilty in Europe of abuse of a dominant position, but it took nearly five years for an international advisory committee to propose ways of dealing with software bundling and the over-slow provision of interface specifications for hardware. The novel result however was that any American or Japanese company wishing to sell into the EU market could legally require IBM to provide critical information that would make competition possible. What Love is hinting at is that if Microsoft is not properly dealt with in the US, then the EU should take immediate action in a regulatory regime that is more streamlined and potentially tougher than that of the US. Richard Stallman, the founder of the modern freeware movement, is concerned that Microsoft will use patents in an undesirable fashion, as it has mentioned in its internal documents, and wants Microsoft to be prevented from using them other than defensively, possibly in conjunction with a mutual-defence polling agreement with other software developers. Rant on: Stallman is right, and this is a very important issue indeed. Software patents issued by a maverick patent office, such as the US Patent and Trademark Office, should be overturned, and in the interim, they should not be recognised elsewhere. The European Patent Office shows signs of similar weakening towards software patents in the face of pressure from corporate patents lawyers desiring to lock-up intellectual property that properly belongs to the world, and not to corporations. The Association for Computing Machinery never envisaged that the algorithms it published be patented, for example, and nothing has changed. It would be a good if WTO member states negotiated that if the US wants TRIPS (the trade-related aspects of intellectual property rights) to be extended, it should reign-in its abuses of intellectual property patenting. Rant off Nader and Love's last remedy concerns porting to new platforms. They want the new owner of MS Office to be obliged to release simultaneously new versions of Office on two platforms other than Windows and Apple. Apart from abundant opportunities to sabotage the versions for other platforms, this is in some ways like licensing and encouraging a monopoly, and likely to result in talking paper clips, as well as entrenching Office, and discouraging competition. It would be far better to disallow any bundling of Office by OEMs, and for some major users like governments to insist on standards for data transfer that effectively prevented Microsoft from the abuses we have seen in the past. As Nader and Love make clear, it is important that remedies address the future, so that competitiveness and real innovation can flourish. There are two long stops on the trial: the States have been considered to be a stiffener to strengthen the DoJ's resolve, as well as having their own concerns. But the ultimate long stop is the European Commission: but can we be reasonably sure that it will act swiftly and decisively? Unfortunately, there is real cause for concern. ®

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