Gigs & Bytes: A Hard Habit To Break
A smoker wanting to deep-six the nicotine monkey might turn to counseling, support groups, medicinal patches, even hypnosis. To break other addictions one might turn to Alcoholics Anonymous, Gamblers Anonymous, rehab facilities and faith-based organizations. It’s not easy ridding oneself of a bad habit. Addictions can be brutal. Just ask any addicted smoker, gambler, drug user or nail-biter.
Or, for that matter, just ask Microsoft.
Already under close scrutiny for its antitrust habit of pulverizing competing companies into so much dust and dirt, the software giant was recently admonished by a federal judge for distributing a proposal to potential clients outlining an exclusivity deal that would prevent competitors from entering the personal music player playground. In was described as “a rare display of indignation,” U.S. District Judge Colleen Kollar-Kotelly demanded that the company explain itself, saying, “This should not be happening.”
What should not be happening? Simply put, Microsoft sent a proposal to several personal player manufacturers stating that if they wanted Microsoft’s software for transferring songs from computers to those players, the manufacturers could not include similar programs from competing software companies.
And if all this sounds way too familiar, that’s because it was only three years ago that Microsoft settled a mammoth antitrust case over distribution practices regarding the company’s Internet Explorer browser. As a result of that settlement, Microsoft promised to play fairly by training employees in regard to antitrust rules and regs. Furthermore, to ensure that Microsoft kept everything kosher, a federal judge was ordered to oversee the company’s business practices.
Of course, Microsoft’s latest attempt to remain king of the hill didn’t go over too well with the Justice Department, which described the incident as “unfortunate.” However, before the government’s attorneys could sharpen their swords and polish their armor for another battle with the Giant of Redmond, Microsoft recanted, claiming that it was all a misunderstanding.
The details surfaced after a federal court document was released. Called “Easy Start” and described as a “draft specification,” Microsoft’s marketing plan called for personal player manufacturers to refrain from including similar software by any company other than Microsoft on their players in exchange for Microsoft-supplied CDs.
Microsoft says it had second thoughts about the “draft specification” after the company’s lawyers looked it over. Oh, yeah, and after an industry rival complained. A Microsoft spokesperson said that the draft had been sent to manufacturers in order to get their feedback, and that the proposal was not a contract, hence it wasn’t vetted by company lawyers.
If there’s one thing Microsoft doesn’t need, it’s another antitrust suit. The company recently ended its last major antitrust case by settling with RealNetworks to the tune of $761 million, including a $301 million cash payment and the establishment of music and game programs to help RealNetworks distribute its products to a wider audience. RealNetworks sued Microsoft in 2003, claiming Microsoft forced Windows users to use the company’s media player instead of similar products offered by rivals.
But one can’t help but wonder what the marketing wizards in Redmond were thinking when they sent that “draft proposal” to the player manufacturers. Microsoft eventually offered up the excuse that the draft proposal was created by a newly hired employee who did not understand the company’s legal obligations under the 2002 antitrust settlement. Meanwhile, as Microsoft plays the “blame the new guy” game, Justice Department lawyers say they will have a talk with the company about its legal training in antitrust dos and don’ts for its employees.
“It’s somewhat amazing it even happened,” Howard University law professor Andrew Gavil said. “It’s troubling that anyone inside Microsoft was still thinking this was a legitimate business strategy.”
Hmm … maybe federal oversight along with employee training sessions just aren’t enough for Microsoft’s antitrust habit. Perhaps Bill and his buds need the services of a good12-step program. And a patch for good measure.
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