At a meeting in Orlando last January, some members of the Liberty Alliance, which includes American Express, General Motors and United Airlines, accused their colleagues-bureaucrats of Sun Microsystems for statements portraying their union as an anti-Microsoft monopoly initiative. However, Sun's executive, Jonathan Schwartz rebuffed them by asking them not to be such hypocrites, because -- "Would any of you be here if it wasn't for Microsoft?"

The Liberty Alliance was created to develop "open" and "neutral" standards for online identity systems, which supposedly would be crucial for a coming generation of Internet services and the growth of electronic commerce. Open to what and neutral to whom? You guess it... neutral to the Microsoft bureaucrats, whose drive to conquer new markets beyond personal computer software, has consistently run into resistance from the economic bureaucrats of other companies and industries, who allied to insure there is a competitive alternative to the services of MS bureaucrats, who had planted their stake in the online identity field with their .Net Passport, Hotmail e-mail accounts, instant-messaging service, and the Windows XP operating system -- the combination of which required users to set up Passport accounts and be on the hook of the MS bureaucrats.

However, the corporate bureaucrats of United Airlines, American Express and General Motors have millions of customers, and each team of bureaucrats determined to exploit Internet commerce itself and for themselves; consequently, they were determined not to relinquish their customer data to another team of bureaucrats operating an online identity system, and certainly not to the Microsoftians.

Yet the alliance also quickly decided that it should not be led by technology companies because Liberty would then lose credibility, being seen as just an anti-Microsoft organization. Consequently, Eric Dean, CIO of United Airlines and the chairman of Liberty Alliance thus spins the dilemma: "We don't want to sell tools for identity management. We're not selling software. We just want to use it." Therefore, the anti-Microsoft rhetoric has to not be so obvious. And the anti-Microsoftians have clarified their approach and their vision of online identity management as basically open technical standards that will allow Web sites and companies to share data, with the "customers' permission", of course. Instead of a single sign-on used everywhere online, they see different sets of credentials much as in a person's wallet — a driver's license, a library card, and a bunch of credit cards from different banks.

On the other hand, the Microsoftians have defended their Passport from the criticism of privacy groups and corporations by clarifying their vision and emphasizing that personal information will not be passed on to marketers, without the "user's permission", of course. At the end of last year, the Microsoftians announced they were adopting a looser model for Passport, which they call "federation". So, the different teams of corporate bureaucrats would control their own "islands" of data instead of relying on a sole brokerage team of MS bureaucrats.

The overly-aggressive plan of the MS bureaucrats generated fear among the rest of the gang of the American corporate bureaucrats that Bill Gates and Co. were positioning themselves as a sole gatekeeper to Internet commerce, thus effectively collecting and storing personal information on millions of people, and more importantly, collecting super-profits. But according to the mantra of economical bureaucrats, the profits on their capital should be equal in the long run, despite the industry it applied in. The super-profits of the MS bureaucrats have been continuing more than two decades, thus effectively transcending into the category of unreasonable profits. The Microsoft's "single sign-on" to many Web sites and Internet services, promoted as a consumer convenience, brought protests from the bureaucrats of professional organizations, credit card companies, airlines, banks, car makers, phone companies, you name them. The MS Passport seemed to the rest of economical bureaucrats as a technology that makes the MS bureaucrats the unnecessary go-betweens between them and their customers, who garner the cream by doing nothing but holding the key of their intellectual property, which should expire a couple of years ago.

During the past two years, the equality drive of the anti-Microsoftians has materialized, firstly, by organizing themselves into the Liberty Alliance, and secondly, by gaining on their band-wagon the majority of the political bureaucrats. The growing roster of Liberty Alliance now includes not only the American economical bureaucrats of AOL Time Warner and Hewlett-Packard, but also international bureaucrats of Sony, Nokia, France Télécom, Bell Canada, the German software maker SAP, the Japanese Nippon Telegraph and Telephone and many more.

The MS bureaucrats have found their advances elsewhere slowed by wary soft- and hard-industry rivals. The MS bureaucrats have had little success to date in convincing the bureaucrats of cell-phone and cable television industries to adopt pared-down versions of their Windows OS. The latter have preferred rival technology — despite the billions of dollars the MS bureaucrats have spent to gain entry into the cable and cell-phone markets. Moreover, the MS bureaucrats are faced the increasing challenge in their back-yard market of personal computers, from where their strength derived but gradually dissipated in new market-places.

The vast majority of economical bureaucrats learned too well the experience of the IBM bureaucrats in the PC business, who had helped  to create a new industry only to lose control of it to the MS bureaucrats by mishandling their property rights for a software and allowing the MS bureaucrats to make an industry standard of it, thus, effectively allowing the latter to collect much of the industry's super-profits for two some decades. Though cable television bureaucrats wanted Bill Gates' money and the latter sought in the cable industry a huge new market for his software, the former didn't want to be the IBM-like losers and get cored out from the inside. That is why Gates' $10 billion spending spree in the cable business over the last five years turned out as a losing strategy. In 1999, the bureaucrats of AT&T's cable division got $5 billion in cash from the MS bureaucrats while bought 2.5 million copies of Microsoft's version of Windows for interactive set-top systems, at $10 a copy. However, the contract terms did not commit the AT&T bureaucrats to actually use the Microsoft software, and they shunned up the Microsoft technology. Despite its lavish spending, the MS bureaucrats have so far only two modest footholds in television set-top box software: on the Ultimate TV digital video recorder used by DirecTV and for some customers of TV Cabo (a Portuguese cable company).

The bureaucrats of the cell-phone and wireless telecommunications industry (including the bureaucrats of Nokia, Ericsson and Motorola) have organized a joint venture (named Symbian) in 1998. Last November at Las Vegas' big annual trade show of the PC industry, the Symbianese announced the Open Mobile Architecture Initiative, which uses the Sun Microsystems' Internet programming language Java for their wireless applications. Their implicit intention has been to develop a cell-phone operating system that would be an effective barrier to the MS bureaucrats' advance in the mobile phone market. Recently, the Nokia bureaucrats have decided to license cheaply their programs for such tasks as Web browsing, messaging, and e-mail, in another effort to prevent the Microsoftians from controlling the key software standards for so-called smart phones. And the bureaucrats of Palm, the champions in the hand-held market, have made their Palm operating system as a separate PalmSource, in order to be more assertive and aggressive in the cell-phone market.

The worry of the cell-phone makers is that they will suffer the fate of PC makers, allowing another company to own a lucrative technology standard. That fear came to surface last February at a telecommunications industry conference in Cannes, France, when the Microsoftians (including the corporate bureaucrats of Intel -- the dominant producer of PC microprocessors) announced that they are working on a joint design for sophisticated phones that they will license to cell-phone makers. This move of the Microsoftians would effectively reduce the cell-phone companies to the equivalent of PC clone makers, who steadily have profits sharply below the average.

Three days ago, the federal judge in the Microsoft antitrust trial indicated for the first time that she was questioning the government's proposed settlement, which she could reject if she found that it was not in the public interest. Deciphering from the aristocratic language, it means that the interests of the political bureaucrats in this matter are not settle down yet either.

The political bureaucrats of an appeals federal court found last June that the Microsoftians had acted illegally to undermine the Netscapeans'  Web browser (Navigator, now owned by the team of corporate bureaucrats of AOL Time Warner) and the Java programming language (created and owned by the corporate bureaucrats of Sun Microsystems). Both these computational tools could have evolved into a viable OS that could compete with the Microsoftians' Windows OS on equal terms, thus undermining the latter's monopoly and bringing down their profits to the average level; and that would supposedly benefit not only the entire upper class but also the commoners in America and around the globe.

After the federal bureaucrats reached an agreement with the Microsoftians and the latter acknowledge to be liable for repeated anti-trust violations last year, the states' bureaucrats became eager to get a slice of that pie too by saying that they wouldn't allow the Microsoftians to continue to stifle competition in the market for computer operating systems (OS) in their particular regions. The Microsoftians argued that the anti-Microsoftians' proposals would destroy the computer software market, raise prices and force the company to stop selling their Windows OS, which runs on 95 percent of the world's PCs.

Under the settlement, the Microsoftians agreed to enable computer makers to remove the desktop icons to several of the software programs (that they include in their Windows OS) and to disclose more information to rival developers so that the Microsoftians' programs would not have advantage over the rivaling software because of their superior interaction with the Windows OS.

The political bureaucrats of nine states who originally joined the bureaucrats of Federal Justice Department's lawsuit against the Microsoftians also signed on to the settlement. But the bureaucrats of nine other states, led by the Californians and Iowans, argue that the settlement is ineffective. They wished that the Microsoftians would sell a stripped down version of Windows OS that would allow computer makers actually to substitute rival programs for those produced by the Microsoftians, rather than simply removing the icons. They are also pushing for broader disclosure provisions, without the exceptions included in the proposed settlement, to ensure that the Microsoftians share information about their Windows OS with rivals. Other crucial provisions of the Californians-led bureaucrats include forcing the Microsoftians to give away the source code for their Internet Explorer browser, and to auction their popular Office software to developers who could create versions for the Linux OS.

The Microsoftian and anti-Microsoftian political bureaucrats (lawyers, legislators and executives) have excessively antagonistic remedies in this case, and the moderate political bureaucrats, like that federal judge, appeared interested in hearing not the opposing views of extremists but rather compromises that would be mutually beneficial to both -- to the few extremists and to the entire establishment.

Consequently, the new judge want to modify the terms of both sides. She discarded the decision of the previous judge (who insisted on compartmentalizing the Microsoftians into several teams of bureaucrats, thus guessing it would restore competition among these teams and between them and the rest of corporate America) and now stays before a dilemma. If she rejects the settlement of the federal bureaucrats with the Microsoftians, she would order the former to continue litigating a case they had chosen to settle; and she would ally herself with the Californians-led bureaucrats in their attempt to corner the Microsoftians. However, if she would manage to extract concessions from each side, there would be a slender chance that she could modify the federal bureaucrats' settlement without rejecting it; consequently, she could fashion a single remedy that would safely transport across the river wolf, goat and cabbage.

The day before yesterday, the Californians-led bureaucrats soften their position pedaling backward of a demand for a stripped down version of the Windows OS, saying information sharing is more important than dismantling the Windows OS. The spokesman of the Californians-led bureaucrats, attorney Steven Kuney began his closing arguments by saying that a stripped down version of Windows, which was the first provision in the states' proposal, is only the fourth most important remedy behind information disclosure and more flexibility and retaliation protection for OEMs. "In this industry more than any other, information is the life blood of innovation" - he said. Disclosing APIs and other technical information is more important than creating a stripped down version of the Windows OS. Nevertheless, he insisted that the scope of the DOJ bureaucrats' settlement would have to be broadened to include emerging technologies such as server OS, handheld devices and set-top boxes. Also the definition of interoperability would have to be clarified, and the settlement's many exemptions would have to be removed.

However, the Microsoftians' lawyers argued that even the softened remedies are punitive, Draconian, fundamentally flawed, and neither necessary nor feasible, because they would hinder the Microsoftians' foray into new markets. The Microsoftians insist that the stripping down their Windows OS would cause undue fragmentation, security problems and harm to consumers as well as the entire "PC ecosystem." They also argued that the anti-Microsoftians' requirements on information disclosure, royalty-free licensing of Internet Explorer and the porting of Office amount to confiscation of the company's intellectual property. The Microsoftians reiterated their complaints that the anti-Microsoftians' proposal is too vague and ambiguous for implementing with certainty and that their industry competitors held too much influence in crafting the proposed remedies of the political bureaucrats. Consequently the Microsoftians refused to budge an inch.

Following suit of intractability, the anti-Microsoftians rejected the Microsoftians' claims that the mild proposal of the former would force the latter to remove their Windows OS from the market, lay off employees, and cease innovating. The anti-Microsoftians say that that kind of doomsday predictions are extreme and hyperbolic, and the Microsoftians strong enough to adapt to the fair competitive conditions.

And so it goes. Apparently the bargaining between the majority of the upper class and the Microsoftians will be a much longer process than I expected, because the economic conditions have drastically changed for the past year. Instead of the national surplus, the upper class has now deficit on its hands and couldn't afford to be so generous (while breaking a monopoly) as it was to the Rockefeller's team of corporate bureaucrats.

6/22/02

On August 7, 2001, the Microsoft bureaucrats asked the Supreme Court judges to consider their appeal, arguing that the low-level federal judge's (Jackson’s) comments to reporters before rendering his decision renders it void and null. Previously, they also asked the mid-level federal judges to stay the mandate that would return the case to a lower court for further proceedings, but now, they want to delay those proceedings, hoping that the release of Windows XP will render the anti-trust case moot and void.

In response, the federal and some state executives suggested that the Microsoft (MS) bureaucrats were trying to delay the case's return to a new low-level federal judge, in order to render it moot after the refurbished Windows will be released on October 25.

the federal and some state executive bureaucrats, while criticizing MS bureaucrats recent legalistic maneuver to docket their case among the upper level federal judges and claiming that consumers could be harmed by further delays in the three-year-old trial, filed the 9-page legal brief, asking the mid-level federal judges to reject that request and allow proceedings to continue with the low-level federal judge while the upper-level federal judges decide whether to hear the appeal of MS bureaucrats. The brief states, "Microsoft has announced that it will soon introduce Windows XP, the next generation of its monopoly operating system. The sooner remedial proceedings begin, the sooner a resolution can be crafted to assure competitive conditions... Until that remedy is in place, each day of delay contributes additional injury to the public interest in competition."

In opposing such a delay, the federal and some state executives emphasized the importance of the upcoming launch of Windows XP, making it clear the new operating system's (OS) competitive aspects would be explored when the case moves forward in order to protect vital consumer and public interests. It sounds well, but what kind of “consumer” and “public interest” they are trying to protect?

In their June 28 decision, the seven mid-level federal judges though overturned Jackson's order to break Microsoft into two companies upheld his eight separate antitrust claims against Microsoft bureaucrats and sent two portions of the case back to a new low-level federal judge, Colleen Kollar-Kotelly, who must rehear the argument that Microsoft’s bureaucrats illegally tied or “integrated” their Internet Explorer with Windows 95 and 98 and who must craft a new remedy in a timely manner.

Legalistic tactics

The legalistic skirmish over jurisdiction is not the first for the federal and MS executives, but the latest decision of the mid-level federal judges necessitated them to change their tactics. After Jackson's breakup order, the federal executive trustbusters asked the upper level federal judiciary to skip mid-level appellate review and take the case directly, while the MS bureaucrats tried to keep the case at the mid-level federal judiciary. The upper level federal judges rejected the request of their executive colleagues; now the MS bureaucrats are asking them to hear an appeal while the federal executives seek to move the case back to a new low-level federal judge.

Many legal experts believe it is unlikely the upper level federal judges would hear soon the request of MS bureaucrats, who rather than attacking the merits of the case, argued that Jackson should have disqualified himself "as of September 1999, the date of his earliest known violation" of codes of conduct for federal judges. According to the MS bureaucrats, "Such disqualification would require (vacating) the district court's findings of fact and conclusions of law". Thus, Jackson's decision expressed in the findings of fact, issued in November 1999, and the conclusions of law, released in April 2000, would never have issued if he had disqualified himself in the first place. Correspondingly, the mid-level federal judges who decided to keep those documents, even though they chastised Judge Jackson’s behavior and removed him from further proceedings, would not overturn the case. But would and could be linguistics cannot make the real interest of the upper class null and void. And that interest called “equality of aristocrats” – that is, equal profits on their equal capitals.

Getting the case back to the low-level federal judge is essential for the federal executives, who are trying to protect the equality of all aristocrats as a social class while camouflaging it as the struggle for equality of all consumers, because they need to maintain decorum in the commoner’s eye. On the one hand, the political bureaucrats want to break the MS economic bureaucracy into two teams thus creating competition between them and leveling their profits to the usual norm. On the other hand, such an intrusion of the political bureaucracy into the economic affairs will show the individual where the social limitations of his housekeeping ingenuity are. And you know that ignorance of the commoners and workers is bliss to the aristocrats.

Economy from Greek means the household laws, but lately those laws treated as the rules directed exclusively toward machines, not the people. This trend is largely characterizes the era of big government, bureaucrats of which tend to monopolize the creation of rules of human behavior. However, such a monopoly of central authority leads to stagnation of local initiative, breeding slavish dependency of the local bureaucracy on the federal one. That is from where derived the latest fad of the WH bureaucrats who now zealously propagandize the so-called faith-based initiative, forgetting that the business is the main American religion and faith.

The political bureaucrats do seek an injunction delaying Windows XP's launch, the final or gold code of which MS bureaucrats are going to release to PC makers today, on Aug. 24. This injunction will delay the selling PCs with Windows XP, which the computer manufacturers have planned to start on Sept. 24, about a month before the official release of Windows XP. It means also lessening the revenue to the federal and state treasuries. But the latter possibility is somewhat a postponed threat to the power of the political bureaucracy. The most obvious threat to the political bureaucrats is that the economic bureaucrats of Microsoft dared to make rules not only for the entire computing industry but also for the communicative and entertaining ones, and that is a domain and sovereignty of the political bureaucrats.

Tactically, to protect their domain and to obtain a temporary injunction against the release of refurbished OS, the political bureaucrats have little time if any. That is why the MS bureaucrats stopped trying to delay the remedial part and letting the case back into trial court (where the political bureaucrats still need to unfold their rational) and transfer their efforts onto changing the minds of the Supreme Court bureaucrats, the majority of whom are still going along with the rest of the majority of the political bureaucrats, who charge the MS bureaucrats nominally with too versatile functionalities of their product that people are complaining about -- that too many unnecessary functions have been added to the Windows XP core system, which are not improving the work of the core and stifle the development of the add-in programs.

Indeed only a handful Microsoft competitors view the bundling controversy over Windows XP as being “blown way out of proportion." The vast majority of them don't like that the MS bureaucrats added to their OS some programs that compete with their own applications. The economic bureaucrats pressured the political ones and it seems that a cold consolation of the majority of the upper class to the Microsoft rule in several industries is growing hotter.

Although the MS bureaucrats insist that there are thousands of developers creating applications for the Windows core system, and the number of programs the MS bureaucrats choose to add to their OS is quite small in comparison. They argue that contemplating over the PC industry as a whole and the work that they put into supporting third-party innovation and development on the Windows core program, the set of companies and individuals working on innovative tools for the core program so vastly outweighs the opportunities that companies lost or will loose because add-in programs became part of the core system.

However, the majority of programmers consider that putting something unnecessary in the core program (OS) should be done only when the developer of the OS wants to bury that something alive. Once he started thinking of that something as being part of the OS, he necessitated keeping the core program and its Application Programming Interfaces secret, making them available only to his confidants. His secrecy keeps lay-programmers from taking advantage of the features of that unnecessary something that were buried in the OS, thus keeping them from developing new applications.

However, the majority of businessmen, including the major PC makers whose accounting department depends on the Windows OS, believes that distribution of Windows XP should not be halted, because they are counting on the refurbished OS to help boost fourth-quarter sales. They argued that the political bureaucrats shouldn't be involved in software design. However, they would not mind if the government asserted its right to make the rules for licensing agreements; and if those licensing arrangements were illegal, then, and only then, the release of a program should be stopped.

Now that a federal appeals court has upheld a ruling branding Microsoft corporation as an abusive monopoly, the attorneys general of 18 states are trying to stop distribution of Windows XP until they can determine whether Microsoft's inclusion of heretofore stand-alone programs (including its digital media player and instant messaging (IM) “technology”) is anticompetitive to other economic bureaucrats and intrudes onto the turf of the political bureaucrats.

Throughout their antitrust scrambles with the federal and state trustbusters, the MS bureaucrats maintain that they are simply assert their right to continue innovating in the development of new versions of their OS that has helped them to become the world's most successful software-makers. Nevertheless, they are caving under the pressure. Thus, two weeks ago, they reached a settlement with the Eastman Kodak bureaucrats over the allegations of the latter that the OS, designed by the MS bureaucrats, gives unfair preference to the digital imaging software of the MS bureaucrats that is comparatively worse on its merits than the EK digital imaging software.

The dispute of bureaucrats of EK and MS is just one example of the challenges the MS bureaucrats face as the developers of the market-leading OS and the providers of software applications and online services. Although the MS bureaucrats insist that there is no “politically correct” test driving the decision to bundle (“integrate”) technologies into XP, such as applications like the Windows Messenger and Windows Media Player that the MS bureaucrats has offered as software add-ins to Windows and made available on other OS platforms, rather, the decision to bundle is part of the evolution of the product and "based on meeting and exceeding the expectations of our users."

While the economic bureaucrats of MS team must comply with the wishes of their shareholders and has to provide value and get people into the stores and to buy their products, they can no longer entice the buyers by saying that now their product is more stable because it has less bugs. Nevertheless, Instant Messenger vendors and digital Media Player providers still worry that bundling programs by the MS bureaucrats into the Win OS will (as it was the case with the Internet browser) harm the market for their applications.

Many of them ask why the MS bureaucrats bundle their own applications with their OS when other OS vendors license add-ins to their platforms from third parties. For instance, the bureaucrats of Apple Computer (AC) rely on MS Internet Explorer to help the Macintosh users traverse the Web. Although the AC bureaucrats made MSIE the default browser on their computers as part of a 1997 deal with the MS bureaucrats, who invested $150 million in the AC corporation, the bureaucrats of latter had not seen the need to reinvent the Web browser and had been offering Netscape Communications' Navigator as the default browser up until that deal.

However, the MS bureaucrats say that they cannot rely upon third parties to provide that functionality. But why?? Is it because Bill Gates does not believe into self-regulating nature of competitive market and capitalist society or what? But that same social system allowed him to grow to the richest man on the planet. If not that disbelieve, then sheer arrogance of knowing how to handle millions of people employed in several industries leads Bill Gates and Co. onto the confrontation with the majority of the upper class.

In their ruling the mid-level federal judges faulted the MS bureaucrats for illegally maintaining their monopoly in Intl OS. But such accusation requires a competitive threat, meaning that something could conceivably replace the monopoly product, be that something either the Netscape browser or Sun Microsystems' Java programming language. That argument would not necessarily apply to other programs, such as instant messaging and media playing, integration of which into Windows XP is under the public scrutiny.

Some MS lawyers argue that if the Netscape browser or Sun Microsystems' Java programming language are not the core OS, they do not threat to the monopoly of Win OS, and thus, the MS bureaucrats are not liable for maintaining their monopoly in Intl OS. Therefore, there is not a clear path to that kind of relief by injunction. But the problem is in the subjunctive mood – those products could be a new OS, and thus, could be competitive to the Win OS if the MS bureaucrats did not stifle them. Moreover, the government lawyers can argue that while the MS instant messaging (IM) and media playing (MP) can compete with IM and MP of other companies, their rigid inclusion into Windows XP will potentially disrupt competition in the IM and MP markets. If the majority of the upper class settled on to broke the MS team, then the political bureaucrats, during the trial on remedies, will definitely include the IM and MP functionalities of Win XP into the scope of the potential remedies, in order to lower the final price of breaking the MS team.

It must be acknowledged that the political bureaucrats are under the increasing pressure from the interest groups. Thus, a Democratic senator from New York, Charles Schumer, being under pressure of his Jewish constituents, has already called on the federal and 18 states DoJ bureaucrats to seek an injunction against Windows XP, questioning whether the bundling of some programs with XP (among them Windows IM and MP) could have an anti-competitive effect.

Already more than 10 privacy organizations petitioned the bureaucrats of Federal Trade Commission (FTC) to take similar action, tending, of course, to stress the privacy and security of an individual. Thus, on Aug.15, the Jewish leaders of these organizations renewed their attacks on the MS bureaucrats and their Passport authentication service and Windows XP, asking the FTC bureaucrats to mandate changes in the refurbished MS OS. They had filed a 12-page supplemental complaint alleging that the MS bureaucrats by offering “Passport” (authentication) and associated services are engaging in unfair and deceptive trade practices in violation of Section 5 of the FTC act.

In the original complaint, the members of the privacy organizations alleged that, "Microsoft has engaged and is engaging in unfair and deceptive trade practices intended to profile, track and monitor millions of Internet users." The complaint further alleged that MS Net programs and services (such as Passport, HailStorm, and MSN) "are designed to obtain personal information from consumers in the United States, unfairly and deceptively."

“Passport” is an MS online authentication program that is used for logging in to multiple Web sites or services. The MS Passport program is the base of the future MS HailStorm program, which will authenticate subscribers to access their e-mail, personal contact list, schedule and other Web services (such as shopping, banking and entertainment) through a variety of communicative devices (such as PCs, cell phones and hand-held computers) from any location.

The MS bureaucrats use the Passport program for some of their MSN Web properties, their messaging service, e-book purchases and new features found in Windows XP. The bureaucrats of McAfee and Starbucks, who cooperate with the MS bureaucrats, use the MS Passport program to authenticate some of their services and goods, offered over the Web.

The amended filing of the privacy organizations focused on changes the MS bureaucrats made to Passport in response to the original complaint of those organizations, which was concentrated on violation of privacy in the Kids Passport program. Based on a review conducted by the Center for Media Education (CME), the members of privacy organizations concluded that Kids Passport does not comply with the Children's Online Privacy Protection Act (COPPA).

Gabriela Schneider, policy analyst for the CME, argued that, "the Kids Passport system is not providing the same or greater protection for children as mandated by the FTC."

The members of CME also concluded that the policy of MS bureaucrats, implemented in the Kids Passport, requires the collection of more personal information than is necessary for children. The members of CME argued that, "gathering their [children] e-mail address and sometimes prompting them to sign up for a Hotmail address, when the parents' e-mail address is already collected for the registration of the Kids' Passport," is excessive and unnecessary.

Although the majority of the programmers are not convinced by those allegations that the MS Passport program is any worse than the same kind of programs implemented by other companies and say that the MS bureaucrats are not asking for any more information than any other sites, the political bureaucrats can use those allegation to sway the majority of the commoners on their own side.

This can happen because of the fear of commoners about their online privacy and easiness with which their private information could be shared by the corporate bureaucrats. The fear can prevail despite the fact that the traditional sharing of personal information of customers by the corporate bureaucrats (such as the bureaucrats of credit card companies who sell without notice your address to third-party marketers) is potentially more damaging to the average consumer.

The members of privacy organizations allege that the decision of MS bureaucrats to reduce the amount of information they collect when people sign up for a Passport account is inadequate because an e-mail address, country, state and ZIP code are required. However, the collection of this kind of information, particularly e-mail addresses, is a common place in the cyberspace.

The organizations also argued in their complaint that "XP will disable certain programs that users depend upon for privacy and security, such as the Internet firewalls (Black Ice and ZoneAlarm). Although the complainants acknowledge changes made to how software drivers work in Windows XP, they failed to note that many software makers will solve or already solved compatibility issue of their programs before the refurbished Windows XP hit the shop-counters on October 24.

The complainants also criticized the MS bureaucrats for requiring Passport merchants to adopt Platform for Privacy Preferences (P3P), which allows Web-users define what types of information they are willing to give, as well as whether they mind that the primary gatherer of that information would share it with third party.

The complainants also alleged that many other privacy abuses (such as forced Passport account sign-up through Windows XP, product activation, and customer profiling) would follow the release of Windows XP.

It is necessary to note that the “product activation” is largely misunderstood because people assume that the MS bureaucrats collect personal data during the process, but they do not. During the installation and registration process of a MS product, optional registration follows product activation. But because “this” follows “that” does not necessary mean that “that” is the cause of “this”. The separate process of product activation does not required your name and address, but such information is required during the registration of a MS program because the MS bureaucrats must know this information in order to inform you about future upgrades.

The majority of programmers think the MS bureaucrats actually have broad incentive to ensure consumers' privacy, because their HailStorm envisioned to abandon the ad-driven Web (with its myriad of merchants who have incentive to collect and profit indirectly from personal data) and to focus on the directly paid services.

The top-ranking MS bureaucrats believe the privacy assurance and delivery of data and services to any kind of device will make HailStorm successful-profitable for them and their partners.

If the MS bureaucrats want the public were paying them money for their services, then, that would be the best guarantee of privacy that the majority wishes to have; because, if somebody violates my privacy, I will immediately turn my money around and buy a competing service. However, this is probably not the case, because the MS bureaucrats have got tons of paper money and now want some real power -- want to dictate the bureaucrats of other corporations, industries, and even Feds how high they must jump.

8/24/01

While the dust of the DOT-COM fever begins to settle down and the bull market is sobering under the pressure of bears, some intellectuals still think that we are living in the Information Age, when intellectual property is almost everything and physical property is just annoying mud. Therefore, they believe that the software and computing operating systems are the heart and brain of our industrial power, and therefore, we rightly should award such people as Bill Gates with a lion share of profits out of our national product; otherwise, that heart and brain would go astray, leaving behind the stubborn hands and legs. If Mr. Gates believes that the brain can breathe and walk for a long time without lungs and legs, and therefore, he can take without fight and indefinitely long the unusually high profits, leaving other members of the upper class with unusually low profits, then, he is a hopeless optimist who lives in his virtual world; but in this world, he will not last for long.

However, until now, Mr. Gates has been building his empire on a more firm ground than that one, which is acceptable by its face value to those intellectual romantics. From the start of his carrier, Mr. Gates conceived his computer operating systems (MS-DOS and Windows) as to be industry standards, but the keys of those standards would be in Mr. Gates’ packet, and therefore, everyone would pay a surcharge to Bill for using that door-window. And Gates understood it too well from the beginning. As he told to a Playboy interviewer who asked him -- why he is a software-maker and not a hardware-maker -- "When you have the microprocessor doubling in power every two years, in a sense you can think of computer power as almost free. So you ask, why be in the business of making something that's almost free? What is the scarce resource? What is it that limits being able to get value out of that infinite computing power? Software. Another way to look at it is that I just understood a lot more about software than I did about hardware, so I was sticking to what I knew well -- and that turned out to be something important."

However, where Mr. Gates used to use the word “important,” the commoners usually use either the word “interest” or the word “profits”. Indeed, Gates has been cunning like Mr. Scrooge in hiding his trade secrets and ruthless like Mr. Rockefeller while cutting down and co-opting his competitors. And just as the upper class wanted to break up Rockefeller's Standard Oil without breaking the generic right of the upper class on the nation’s surplus product, so they seek to dismantle Gates' Microsoft Corporation. They broke up Standard Oil Corporation but paid to Mr. Rockefeller four times the nominal value of that corporation, thus, feeding the wolves and preserving the sheep. Now the question is – how much redemption money are they willing to pay for the monopoly key of Mr. Gates?

Make no mistake. Microsoft Corporation will be broken. The question is – when? And that depends on how much the aristocrats as a class can garner from the commoners and laborers in order to pay out for breaking Mr. Gates’ team.

With the present computing hardware and software, every home might be not only a learning and trading post but it also might be an entertainment center; and that is potentially a trillion dollar market. Gates began his business out of a simple idea that crystallized out of his murky longing for power -- to find the bottle-neck of the social energy flow, to erect gates over there, and to keep keys of those gates to himself. Implementing this idea, Bill Gates used rationally his workers and kept them from fleeing to other software manufacturers by sharing the wealth through lavish stock options. He was not the first to try this internal tactic, but no one had shared the profits with friends and co-workers on such a large scale. After being only two decades in business, the Microsoft’s roster had more than twenty thousand millionaires, who became the skeleton of Microsoft bureaucratic team -- magnates and masters of industry, the ones who integrate it and bring it to fullest fruition. Such mega-success was, is, and always will be many different things to the captains of other, not so successful, industries. To some -- they are role models and computer-wizards who promise that democratic capitalism nurtures a meritocracy of the naturally talented, to others -- the generous to friends and ruthless to foes, like the Rockefellers and Capones. But to the majority of commoners and laborers -- they are evil incarnate, representatives of all that is wrong in our system, which is not preventing but even deepening the economic disparity between the social top and bottom by promoting the parasitic, monopolistic thriving in certain areas of social life.

Friends and colleagues praise Gates' ability to "parallel processing, unlimited bandwidth and multitasking”. They are ecstatic about his ability to work on two computers at once in his office at Redmond, Washington, where he sequences data coming in one computer from the Internet, while with the other -- handles the hundreds of daily e-mail messages, through which he keeps in touch with employees and friends. According to Microsoft president Steve Ballmer (a former Harvard classmate who graduated, but Bill didn't, and whom Bill lured onto his team in 1980 from Procter & Gamble), even Bill's famously contentious style is a positive, because, "Conflict can be a good thing. The difference from P & G is striking. Politeness was at a premium there. Bill knows it is important to avoid that gentle civility that keeps you from getting to the heart of an issue quickly. He likes it when anyone, even a junior employee, challenges him, and you know he respects you when he starts shouting back."

Other colleagues joke that his Operating System (OS) is a fair representative of his mind and has many of his problem-solving capacities. Mr. Gates goes along with own cult, partially because he is so heavily invested in Microsoft Corporation and his wealth at any given moment is tied intimately to the share price of Microsoft stock. Thus, in 1996, when the surge of the DOT-COMs began and Microsoft’s stock jumped by 88 percent, Gates’ personal wealth increased by nearly $11 billion, or about $30 million a day. Gates was squeezing out of the Americans and the people of other national allegiances nearly $350 a second and might buy a brand new car every minute. However, when the love affair with the DOT-COMs became fading in past year, Gates lost nearly $32 billions and became the second richest man on the earth. Marring and settling down, Gates built a 40,000 square foot home outside Seattle, which has the vaulted garage that can shelter 30 cars and from which Mr. Gates can overlook Lake Washington. Extremely modern, this house is a fair reflection of its owner – simple in appearance but extremely utilitarian inside. Under the influence of his wife, Melinda, Bill became softer and more philanthropic. Through a foundation run by Bill's father, the Gates have donated billions of dollars, mostly for education, libraries, and public health. Thus, in 1999, the Bill and Melinda Gates Foundation granted nearly $950 million for vaccines against preventable diseases and $1 billion to fund the Gates Millennium Scholars program, to enhance minority access to higher education. In 2000, the Gates foundation's assets topped $22 billion and it gave away almost $1 billion.

This year, the Bill and Melinda Gates are going to donate $100 million to a United Nations (UN) health fund for the AIDS research because they think that improving health of the world population is key to poverty reduction, Of 36 million people infected with HIV around the world, 26 million live in Africa. It was assumed that, on our planet, 23 million people have died from the virus, including 17 million in sub-Saharan Africa alone. However, at a UN conference on poverty last month, EU countries stepped back from donating money to the fund, arguing there were not enough guarantees yet that the money would be spent correctly. They argued that it would be the same as to increase funding in public education in New York City, where the 84% of school funds spent on the bureaucracy and only 16% -- on the teachers and students. Paul Nielson, the EU's development commissioner, argued that the fund needed to broaden its approach to include other diseases, including tuberculosis and malaria, and to provide cheaper drugs for poorer countries. So far, the US and France have been the only large donor countries to have contributed to the global fund, giving $200 million and $135 million respectively. Nevertheless, the Gates have donated in the past five years $750 million to an AIDS research, in hope to boost global immunization efforts and to search new medicine.

However, the total amount of the Gates’ donations for each year of the past five years was precisely one tenth of what Bill has been squeezing the Americans out. Probably like Bill Clinton, Bill Gates promised to God the tithe, but no more.

You probably already noticed that the upper class ideologists usually ascribed to God their own collective jealousies. However, not so smart aristocrats sometimes call these things by their first name, without alluding to something else. Thus, Rob Glaser (a former Microsoft executive who left this team for the RealAudio team, to run an Internet sound system company) has called his former boss -- "Darwinist”. Deciphering Bill’s nickname, Mr. Glaser has continued, “He [Bill Gates] does not look for win-win situations with others, but for ways to make others lose. He defines success as flattening the competition, not creating excellence. Thanks to Bill's contentious style, the atmosphere among the Microsoft teammates was like a Machiavellian poker game where you would hide things even if it would blindside people you were supposed to be working with."

Many people in Silicon Valley assert that the Microsoft bureaucrats use "their existing monopoly to retard introduction of new technology." The charge that Gates and his team are rather evolutionaries than revolutionaries is common among the direct competitors of Mr. Gates, among those who manage the cutting-edge high-tech companies. Consequently, because of God’s and the rest of the aristocrats’ jealousy, Bill Gates and the Microsoft team had been for most of the 1990s under constant legal bombardment and a lengthy and inclusive investigation by the Federal Trade Commission. That verbal assault was materialized into the antitrust suit filed by the federal and several state Departments of Justice (DoJ) that led to a federal district judge’s (Jackson) order to break up the company.

For good measure, any rich guy might be charged with the same crime. The Rothschilds and Rockefellers invented neither the economic bureaucracy nor even the gasoline-powered engine; rather, they mastered own fortunes by being the better keepers of what their ancestors had managed to steal and to rob from other people; and that we usually call "the principle capital". Then, directing the principle capital to acquire an invention of other people and making monopolistic use and abuse out of it by thoroughly guarding that invention from other people (including its real inventors), the proprietors organize their "lawfully acquired" property in such an order as to perpetuate their own dominance in that territory or industry. And in this sense, the new digital era is no better or worse then were the previous ones. And probably that is why Gates’ immediate rivals seem to be mean in attacking the man, his products, and his commandos.

Thus, once, Borland CEO, Philippe Kahn compared Microsoft to Germany under Hitler; another time, he likened Microsoft's Windows system to HIV-virus. Concurring with him, Lotus founder, Mitch Kapor declared that Microsoft's dominance had turned the software industry into "the kingdom of the dead." Apparently the most antagonistic of Gates’ many competitors, Oracle CEO, Larry Ellison told a May 1998 Harvard computer conference that the Microsoft's way of business was "patently illegal ... more blatant than anything Rockefeller ever did". Moreover, Mr. Ellison accused Mr. Gates of "lying" about Microsoft's record of innovation. Evenhandedly, probably that is why Oracle bureaucrats also hired the private detectives of Investigative Group International to dig up dirt on their rivals of Microsoft, literally going through the trash of the latter.

In present-day cyberspace, using a latest Microsoft OS and Internet Explorer (IE), we can easily find Web sites with names like HateBillGates.com, the Microsoft Hate Page, Punch Bill Gates, Boycott Microsoft, and the Bill Gates Wealth Clock. The keepers of the latter track Gates’ gross worth by seconds, based on the 141,159,990 shares of Microsoft he owned as of 1995, and for splits in 1996, 1998, and 1999. As of today, the Microsoft share price is sitting around $65; consequently, Bill Gates is worth about $73 billion. If anyone missed the bigger picture, the site-keepers remarked, that "If you want to know what God thinks about money, just look at he people He gives it to." And we are going to do just that.

Birth of Gates' Monopoly

Gates Sr. has been a prominent and wealthy attorney in Seattle, and his wife (Bill's mother) has been a childhood friend of Meg Greenfield, the longtime editorial-page editor of the Washington Post. That is why the couple managed to put Bill through the fashionable and academically rigorous Lakeside School, where he and his friend (Paul Allen) stumbled upon a fossilized school terminal bought with the proceeds from a Mothers' Club cookie sale and where they got the first taste of computing power. Being eighth graders and learning the BASIC computer language, two friends had produced their first program in 1968. Soon, by evenings, they were debugging a computer for a Seattle company, getting their spare change. Being a tenth grader, Bill wrote a scheduling program for Lakeside School. By this time, Bill and his friends (Paul Allen and Kent Evans) were contracted to write a payroll program for a local firm and to analyze the traffic data for the City of Seattle.

In 1973, Bill graduated from Lakeside School and moved to Harvard, while Allen went to work for Honeywell and Evans died in a mountain-climbing accident. Two years later, the moment of Microsoft's conception occurred. This event enshrined in the corporate mythology as follows. Paul drifted to the East to be near his computer pal. One day, he stumbled on an issue of Popular Electronics magazine with a cover of the Altair 8800 of Micro Instrumentation and Telemetry Systems (MITS), a primitive and capricious computer that promised to be the first personal computer. Paul shouted at Bill -- "It's about to begin!" Thereafter, Bill and Paul were busy writing a program for the Altair. In February 1, 1975, they sold it to MITS, their first customer. Thereafter, Bill became Harvard's most famous dropout, and the friends moved to Albuquerque, New Mexico, where the headquarters of MITS were.

Soon, the conception of Microsoft followed. First, it was thought to be a branch of MITS, and therefore, was spelled as Micro-soft, which finished its first year with three employees and $16,005 in revenues. However, Bill and Paul were still hesitating, trying to resolve the fundamental question -- what part of the computing business they were going to be in. Paul had favored a combination of software and hardware, because all the computing giants of the time were in pursuit of hardware. Bill, on the other hand, wanted to do only software, because he assumed that the microprocessor doubling in power every two years, thus, making hardware as almost free. However, Bill got into this business because he longed for money, power, and social success, and his desire prevailed.

By 1980, Gates and Allen moved their headquarters to the State of Washington, and Microsoft became a 40-person team, generating about $7.5 million in revenues. In one year, the firm had grown up to the company, which had three times as many employees and more than double the revenue. In that year, the IBM bureaucrats employed the Microsoft team to develop software for their new Personal Computer (PC). They enticed Gates and Allen to improve their 16-bit malfunctioning brain inside, so-called Disk Operating System (DOS), by giving it away to Microsoft. Receiving the sole right on DOS, Gates and Allen renamed it into MS-DOS and began to license it to other companies and individuals. As Gates put it, "We wanted to make sure only we could license it. We did the deal with them [the IBM bureaucrats] at a fairly low price, hoping that would help popularize it...  We knew hat good IBM products were usually cloned, so it didn't take a rocket scientist to figure out that eventually we would license DOS to others. We knew that if we were going to make a lot of money on DOS, it was going come from the compatible guys, not from IBM." Thus, Mr. Gates' train had started to accelerate.

In the early 1980s, after a bout with Hodgkin's disease, Allen left Microsoft and became a venture capitalist, a sports team owner, and the founder of a rock-and-roll museum. Meanwhile, Gates and the rest of the Microsoft team, given an enormous leg up by the IBM bureaucrats’ failure to take advantage of their own operating system, were making a lot of money.

By the mid-1980s, the Microsoft team had won the personal-computer operating systems battle, and turned its attention toward dominating the "office suite" market that combined the word, spreadsheet, and graphic processing. Each new conquest further engrained MS-DOS (which later became Windows) as the industry standard. Thus, under an agreement with the IBM bureaucrats, which some would deride as the "computer tax," all manufacturers IBM personal computer clones had to pay Microsoft a royalty on every computer shipped, whether or not the machine was equipped with MS-DOS. Revenues for 1985 stood at over $140 million, more than nine times what they had been when the company's operating system was first introduced. The next year, the company went public, at $21 a share with the price rising to $28 by the end of the trading day. Fifteen years later, one of those original shares was worth about $10,000, adjusting for stock splits.

So, Bill Gates might be fairly described as an ultra-successful entrepreneur who knew how to turn technological innovations of others into his own commercial, and therefore, social success.

Capitalizing in Cyberspace

Since the 1960s, when the bureaucrats of the DoD's Advanced Research Projects Agency had authorized an experiment in networking, known as the Arpanet, there was a parallel movement in the development of computing industry that was led by Bob Kahn and others. As the Arpanet evolved into the Internet, the digital interconnection of the world's bureaucracy was launched. It brought many new economic and political opportunities for the knowledgeable, particularly, for Bill Gates, whose understanding of being on top means to make certain that the vast majority of computer users would go into cyberspace using Microsoft products, the keys of which would be "naturally" in the packet of Mr. Gates and Co. And Microsoft Corporation has plenty of cash reserves to afford some temporary losses while killing the competitors by drying up their bottom lines. By making certain that Microsoft's IE would never fly far from its basic OS, Mr. Gates wants to be sure that the users of Microsoft's products would spend the lion share of their computing resources onto the Microsoft's products. That is why he bundled the IE with Windows and created the Microsoft Network (MSN) in 1995. Within its first three months, MSN bureaucrats had managed to enrolled more than half a million users. Thereafter, what was the most popular PC OS became the most popular Web exploration software. By the turn of the millennium, the influence of the Microsoft bureaucrats would permeate all over the Internet and intranets, and into multimedia, on-line magazine publishing, Web TV, and just about every neck of the wood. However, such omnipresence would be precisely what drives the rest of the upper class crazy, because their own talents and ambitions were about to be wasted.

Just as had been the case with Rockefeller's Standard Oil nine decades earlier, the political bureaucrats of the DoJ and courts appeared unable to slow down the Microsoft economic bureaucrats. A year ago, Judge Jackson had ruled against Microsoft in the antitrust case, based his decision on such facts as -- in February 1999, the Internet fact gatherers of Stat Market reported that the Microsoft IE was being used by nearly 65 percent of all Net surfers worldwide, but one year later, more than 86 percent of global surfers were using the IE. Moreover, 93 percent of global Net surfers were also using a Microsoft licensed Windows OS, 

Internet Browser

Despite Judge Jackson's decision, Mr. Gates is enhancing and expanding the use of his instant messaging software, a move he believes could give him dominance over his rivals from the AOL and Yahoo. Mr. Gates said recently his Windows Messenger would support the ability to send audio and video across the Internet, allowing users to share documents and even giving them access to other PCs. Windows Messenger will be included with the XP Windows system scheduled for release in October.

Mr. Gates raised the stakes in tense negotiations with Mr. Chase of AOL-Time Warner, announcing that the next version of Windows will include a built-in suite of instant-messaging applications. The real-time communications feature will be included in the Windows XP operating system, posing a fresh challenge to the AOL-Time Warner’s popular messenger. Mr. Gates said his Windows Messenger feature would unify existing technologies that allow Internet users to “chat” in real time, using text, voice or video-conferencing. “We think this is really a whole new communications category -- it’s the unification of not just instant messaging, but voice, audio and video collaboration,” said Greg Sullivan, the manager for Windows XP. “The real focus here is on making it easy so that everybody can actually get it to work, improving the quality and basing it on standards.” Real-time messaging also is a key part of Microsoft’s vision for Hailstorm, a recently announced set of technologies intended to allow Web communications over a wide range of devices -- not just PCs.

What’s up, doc?

To Mr. Gates’ enemies, Windows Messenger sounds a lot like a replay of the Microsoft’s successful play to gain dominance of the Internet browser market at the expense of former market leader Netscape -- a strategy that was described as an illegal abuse of monopoly power by Judge Jackson. To remedy the antitrust violation, Jackson ordered Microsoft broken in two, but the effect of his order has been postponed pending a ruling on the Microsoft’s appeal, which is expected by the dusk of this summer.

Microsoft’s antitrust defense always has been built on what the bureaucrats of this corporation see as their absolute right to add any new features to Windows as long as they arguably benefit consumers. There is nothing new about providing communications technologies as a part of Windows. The current Windows ME operating system, for example, includes the Microsoft’s MSN Messenger – an instant-messaging tool along with less commonly used features allowing for virtual meetings and PC-based phone calls.

Ed Black, president of a Washington-based Computer and Communications Industry Association, the majority of members of which usually oppose the bureaucrats of Microsoft Corporation, sees something more insidious at work, comparing the move to the way Mr. Gates and his team used their OS as a lever to overcome the dominance of the Netscape’s browser and to take control over the browser market. As Mr. Black eloquently put it, “It is the same basic pattern and practice of bolting products and, increasingly, services to a monopoly product. We are convinced it is highly anticompetitive and illegal in violation of antitrust laws. It is exactly the kind of misuse of monopoly power that was at the heart of creating the antitrust laws. The goal is for products to compete on the merits and not on the basis of dominance of another market.”

Mr. Gates has been waging a trade-war against Mr. Chase of AOL over instant messaging since at least 1998, when a very public fight between the two corporate bureaucracies over standards focused broad attention on the explosive popularity of the young communications medium. For several months, the two corporate teams played a high-tech game of hide-and-seek as Microsoft attempted to make its MSN Messenger service work with the far more popular AOL Instant Messenger.

The AOL bureaucrats managed to freeze out the MSN customers, and since then the Microsoft bureaucrats have focused on the creation of a standard that would allow users of MSN Messenger to communicate with users of similar services such as Yahoo! Messenger. The AOL bureaucrats, however, have not agreed to support the standard. That is a major stumbling block because the company controls 70 percent of the market through its two messaging services, according to the analysts of Jupiter Media Metrix, who estimate that more than 50 million Americans do some type of instant messaging each month. Just two years ago, 110 sites controlled users’ time. Now it is down to 14, with four of them accounting for 50 percent of all online minutes.

According to a Jupiter Media Metrix analyst, David Card, mergers, acquisitions and closings of many DOT-COMs and aggressive cross-promotion are reasons behind a “dramatic concentration” of how people spend their time online. Moreover, more than half of all time spent online centers around just four companies – AOL-Time Warner, Yahoo, Microsoft-NBC and Napster sites. Taking into consideration that Napster will be out of this league by the end of this year, there will be only three competitors on this market. More than one-third of the total time that people spent online, they spent it through the outlets of AOL-Time Warner, the proprietary service that has 29 million subscribers and other online services and Web sites.

Consolidation is a normal part of any industry and the DOT-COM crash has resulted in hundreds of sites either closing their doors or being swallowed by the bigger fish. However, the population of the Web surfers becomes larger, younger and less sophisticated, thus, tending to congregate around a handful of sites, which can be easily found and navigated. Therefore, almost one-third of online adults visit now 10 or fewer sites a month, according to the analysts of Jupiter. A vice president of Starcom MediaVest Group, Mr. Tobaccowala put it as follows, “The more time you spent online you go to fewer places and that reinforces consolidations [of those corporate sites].” Furthermore, the bureaucrats of the major Internet Service Providers (ISPs) are also increasingly doing everything they can to keep customers within their own networks of sites. It is somewhat similar to television where, despite having hundreds of TV networks to choose from, people typically watch only about six different channels.

In its first quarter earnings report, Yahoo president, Jeff Mallet noted that his prime focus is keeping the 67 million registered Yahoo users happy and within the Yahoo pages. Bolstering his self-promotional strategy, Mr. Mallet said that the time spent within the Yahoo site increased an average of 80 minutes a month in April 2000 to 120 minutes in December.

Talks between the bureaucrats of AOL and Microsoft were turned off late last week but now on again. The instant messaging is one of the main issues of contention along with the fate of two competing technologies for playing audio and video over the Internet -- one from Microsoft and one from RealNetworks, which aligns with AOL. As a deadline approaches for final changes to Windows XP, Mr. Gates said that his team is still at odds with Mr. Chase’s team. Even though the system is scheduled to go on sale October 25, final code changes probably have to be made at least six to eight weeks earlier.

Some analysts say that while the move of Mr. Gates on instant messaging inevitably will raise eyebrows, his corporate team is probably on solid legal ground, with the imminent appeals court ruling expected to go in his favor. As Mr. Barnicle, an analyst for Pacific Crest Securities, noted: “There is nothing illegal about being a monopolist. As long as Mr. Gates deals fairly with his competitors, they will have a hard time making an antitrust case out of the instant-messaging battle. But an agreement with AOL would provide some extra insurance. It would mitigate a lot of the antitrust concerns.”

Not only that, but Mr. Gates’ competitors will be hard-pressed to prove in the court of law the harm to consumers from a technology seen by some as a leap forward in hard-to-use Internet tools like videoconferencing. The harmful effect of Mr. Gates’ team’s activity on consumers will be hard to prove because, politics-as-usual, the Microsoft bureaucrats are building support for their efforts by tying their Internet Messenger with a Windows platform onto which outside developers can build new applications, thus, tying them to it and making them the proponents of the Win OS and the ardent fans of the Gates’ team.

Evolving System

As it had been with Standard Oil, the political and economic bureaucrats, as the entire upper class, did not wanted to brake their own "right" onto the national surplus product while depriving John D. Rockefeller of his monopolistic capital. Therefore, the supreme court bureaucrats stroke a balance -- they ordered to pay Mr. Rockefeller thrice of the face value of his shares, knowing that this would soon be gone due to inflation and the nature of money that is not a capital, with which the lower classes might be exploited.

In our time, the class of bureaucrats wants the same, but the masses became more sophisticated -- they also learned one or two tricks of their own in order to control the distribution of the national surplus. Although the economic bureaucrats are pressuring the political ones to break the Microsoft team, the political bureaucrats fear to lose their authority for paying either too much or too little redemption money to Bill Gates. So, what it's gonna be?

According to the compilers of Computer Industry Almanac, 350 million people globally are expected to be using the Internet at the end of this year. A year ago, about 43 percent of all Internet users were Americans; by 2005, they will consist only 28 percent of all 765 million people around the globe who will use the Internet habitually. As the Web is spreading exponentially, opportunity to exploit the alien lower classes is spreading with it. The economic bureaucrats of Microsoft, AOL, Macintosh, Lotus, Netscape, and legion of others had all played a role in launching the ultimate money making machine such as the world had never known before. The global bureaucracy is coming!

But for now, the Americans, while they are still Americans, stay before one dilemma -- who they will pay for the access keys to the Internet? To the national bureaucracy as a whole or to a particular economic bureaucrat such as Bill Gates? That is the trillion-dollar question, which will be soon decided -- if not in the courts of law, then, at the public squares.

6/5/01

On Monday, April 3, U.S. District Judge Thomas Penfield Jackson ruled that the Microsoft Corporation, a software maker, violated the Sherman (anti-monopoly) Act, 15 U.S.C. §§ 1 and 2. In May 1998, the Justice Department and the attorney generals of 19 states sued Microsoft alleging the corporation had leveraged its Window monopoly to crush a threat by rival Netscape Communications. According to the Justice Department, Microsoft set out to squash Netscape by illegally using strong-arm tactics, from exclusionary contracts with computer makers and Internet service providers to rigging Microsoft software so it would not work with competing products. The illegality of Microsoft’s conduct consists in tying its Web browser to the Windows operating system in order to crush rival Netscape Corporation and its Web browser.

Microsoft’s bureaucrats obviously disagreed with the judge, saying that they would appeal. The rival economic and political bureaucrats however, applauded Jackson's ruling. The attorney generals of the 19 states and federal attorney general Janet Reno are very pleased with Jackson's ruling. Janet Reno said Microsoft "has been held accountable for its illegal conduct by a court of law;" consequently, "consumers who have been harmed can now look forward to benefits." In his turn, a plaintiff of the federal bureaucracy in the lawsuit, assistant attorney general Joel Klein stated: "We are very pleased with the court's ruling… The decision will benefit consumers and stimulate competition in the high-tech industry. "

Keep the above-mentioned statement in mind. The goal of the political bureaucrats is – to benefit us, consumers, through stimulating competition in the high-tech industry. You will shortly see how this goal has been implemented so far.

The April of 2000 landmark ruling is the second of three decisions that will be made by the court of lower instance in this case. In November of 1999, the judge issued an initial ruling, finding that Microsoft does in fact have a monopoly over the Intel compatible Personal Computer Operating System (Intl OS). Microsoft has wielded its tremendous power to bully competitors and stifle innovation wherever it sensed a potential threat to its monopoly in the Intl OS market.

In that ruling, Jackson found in favor of nearly every one of the political bureaucrats' allegations. The gist of Jackson’s first ruling was -- "Microsoft also engaged in a concerted series of actions designed to protect the applications barrier to entry, and hence its monopoly power, from a variety of middle-ware threats including Netscape's Web browser and Sun Microsystems’s implementation of Java."

The "applications barrier to entry" means the application profitability threshold to enter a piece of software in its relevant market. There is a certain amount of expenses, above which the software developers cannot usually transcend without unbearable sacrifices. The "middle-ware" refers to cross-platform software, such as Sun’s Java technology, that can increase speed and make it cheaper to port other programs, which are working on top of an operating system (OS). The OS is the primary program that starts your computer, such as Windows, Linux, Mac OS, OS2, etc.

The judge also ruled that Microsoft's decision to make the Internet Explorer Web browser part of the operating system had no business or technological reason other than keeping Netscape from profiting from its Navigator Web browser.

Since that ruling, both sides engaged in intense negotiations under the guidance of U.S. District Judge Richard Posner of Chicago. The latter finished the negotiations, saying the differences between the two sides were "too deep-seated to be bridged." Then Jackson had delayed for ten days his second ruling, giving the sides another chance for amicable reconciliation. However, after the collapse of negotiations, he decided to release his second decision that essentially decides how the law applies to the facts established in the first ruling.

In his "conclusions of law," Jackson wrote that Microsoft used "predatory acts" to prevent for several years (and perhaps permanently) Netscape's Navigator and Sun Microsystems' Java "from fulfilling their potential to open" the Intl OS market to competition on the merits of their products. The "predatory" competition tries to complete the total elimination of a competing product in its market.

Jackson wrote:
"Because Microsoft achieved this result through exclusionary acts that lacked pro-competitive justification, the court deems Microsoft's conduct the maintenance of monopoly power by anti-competitive means… Only when the separate categories of conduct are viewed, as they should be, as a single, well-coordinated course of action does the full extent of the violence that Microsoft has done to the competitive process reveal itself… In essence, Microsoft mounted a deliberate assault upon entrepreneurial efforts that, left to rise or fall on their own merits, could well have enabled the introduction of competition into the market for Intel-compatible PC operating systems… While the evidence does not prove that they would have succeeded absent Microsoft's actions, it does reveal that Microsoft placed an oppressive thumb on the scale of competitive fortune, thereby effectively guaranteeing its continued dominance in the relevant market."

The judge ruled that Microsoft used illegal measures to protect its dominance in the Intl OS market, illegally increasing expenses for Netscape, Sun Microsystems, Apple Computer and others, that prevented them from improving their products, thus harming consumers.

Microsoft illegally made its Web browser non-removable from Windows. At first glance, Microsoft apparently gives its browser away for free and it apparently benefits consumers. At a second glance however, Microsoft includes the price of its browser in the price of its OS. Consequently, the consumers lose in the Intl OS market what they gain in the browser market. Moreover, trying to save its monopoly in the Intl OS market, Microsoft is using its economical power to keep Netscape from making a living in the Web browser market. Eliminating its competitors in the browser market, Microsoft enjoys the lack of competition in the Intl OS market and can afford to keep the prices of its Windows and Office products stable while decelerating the qualitative development of these products. Jackson concluded that this elimination of competition in both markets came at an additional price to consumers.

Jackson wrote:
"The fact that Microsoft ostensibly priced Internet Explorer at zero does not detract from the conclusion that consumers were forced to pay, one way or another, for the browser along with Windows... Despite Microsoft's assertion that the Internet Explorer technologies are not 'purchased' since they are included in a single royalty price paid by [the computer makers -- OEMs] for Windows 98 … it is nevertheless clear that licensees, including consumers, are forced to take, and pay for, the entire package of software and that any value to be ascribed to Internet Explorer is built into this single price."

Jackson ruled one charge in favor of Microsoft -- the charge of "foreclosing Netscape from the Web browser market" or of shutting off Netscape's ability to distribute its Web browser.

Jackson said that despite the fact that Microsoft's exclusionary agreements with the computer makers (OEMs) and the Internet Access, Service, and Content Providers (IAP, ISP, and ICPs) were directed to exclude Netscape from its potential market, the latter still enjoy more than 40 percent of the browser market. Although those Microsoft deals were anti-competitive and deprived Netscape from the most effective distributive channels, they "did not ultimately deprive Netscape of the ability to have access to every PC user worldwide to offer an opportunity to install Navigator. Navigator can be downloaded from the Internet. It is available through myriad retail channels. It can (and has been) mailed directly to an unlimited number of households." Because Microsoft did not manage to acquire more than the 60% of the browser market share, the judge stated that the legal precedents would not allow him to rule in favor of the government on this instance. However, Jackson stated that his ruling in the favor of the economical bureaucrats in this case did not lessen his other findings against Microsoft.

The plaintiffs charge that Microsoft has waged an unlawful campaign in defense of its monopoly position in the Intl OS market. Specifically, the plaintiffs contend that Microsoft violated §2 of the anti-trust law by engaging in a series of exclusionary, anti-competitive, and predatory acts to maintain its monopoly power. They also assert that Microsoft attempted to violate §2, albeit unsuccessfully to date, by monopolizing the market of Web browsers. Finally, they contend that certain acts of Microsoft violated § 1 of the law. These Microsoft acts were a part of its campaign to protect its monopoly power, namely tying its browser to its OS and entering into exclusive dealing arrangements with the major OEMs, ISPs, ICPs, and ISVs.

Jackson concluded that the bureaucrats of Microsoft maintained their monopoly power by anti-competitive means and attempted to monopolize the Web browser market, violating both paragraphs of the anti-monopoly law by unlawfully tying their Web browser to their OS. However, he did not find enough evidence that Microsoft's marketing arrangements with other companies constituted unlawful exclusive dealing under criteria established by leading precedents under § 1.

The plaintiff states seek to ground liability additionally under their respective anti-monopoly laws. Jackson found that the evidence proved violations of the anti-monopoly law and satisfied the analogous laws of each plaintiff state. Therefore, Microsoft is liable under those particular states' laws as well.

Section 2 of the anti-monopoly law declares that it is unlawful for a person or firm to "monopolize . . . any part of the trade or commerce among several states, or with foreign nations." This language operates to limit the means by which a firm may lawfully either acquire or perpetuate monopoly power. Specifically, a firm violates § 2 if it attains or preserves monopoly power through anti-competitive acts. The offense of monopoly power has two elements: 1) the possession of monopoly power in the relevant market; and 2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident. The monopolization doctrines directed to discrete situations in which a defendant's possession of substantial market power, combined with his exclusionary or anti-competitive behavior, threatens to defeat or forestall the corrective forces of competition and thereby sustain or extend the defendant's agglomeration of power.

The threshold element of a § 2 monopolization offense is "the possession of monopoly power in the relevant market." Therefore, the court must first ascertain the boundaries of the commercial activity that can be termed the "relevant market," for without a definition of the relevant market there is no way to measure defendant's ability to lessen or destroy competition. Then the court must assess the defendant's actual power to control prices in that market or to exclude competition from it, because monopoly power is technically the power to control prices or exclude competition.

In this case, the plaintiffs postulated the relevant market as being the worldwide licensing of Intl OS. Whether this zone of commercial activity actually qualifies as a market, monopolization of which may be illegal, depends on whether it includes all products that are reasonably interchangeable by consumers for the same purposes, because the ability of consumers to turn to other suppliers restrains a firm from raising prices above the competitive level. Therefore, the definition of the 'relevant market' rests on a determination of available substitutes.

Based on the evidence, Jackson found that there are currently no products (and there are not likely to be any in the near future) that a significant percentage of computer users worldwide could substitute for Intl OS without incurring substantial costs. He has further found that no firm not currently marketing Intl OS could start doing so in a way that would, within a reasonably short period of time, present a significant percentage of such consumers with a viable alternative to existing Intel-compatible operating systems. From these facts, he has inferred that if a single corporation controlled the licensing of all Intl OS worldwide, it could set the price of a license substantially above that which would be charged in a competitive market. Moreover, it would leave the price there for a significant period without losing so many customers as to make the action unprofitable. This inference, in turn, has led him to find that the licensing of all Intl OS worldwide does in fact constitute the relevant market in the context of the plaintiffs' claim that the bureaucrats of Microsoft maintain their monopoly.

Jackson found that the plaintiffs proved that Microsoft possesses a dominant, persistent, and increasing share of the relevant market. Microsoft's share of the worldwide market for Intl OS currently exceeds 95% and the corporation's share would stand well above eighty percent even if the Mac OS were included in the market. The plaintiffs also proved that the application profitability threshold to enter the relevant market protects Microsoft's dominant market share. This threshold ensures that no Intl OS other than Windows can attract significant consumer demand, and the threshold would operate to the same effect even if Microsoft held its prices substantially above the competitive level for a protracted period of time. Together, the proof of dominant market share and the existence of a substantial profitability threshold to effective entry create the presumption that Microsoft enjoys monopoly power. Defendants have monopoly power through the profitability threshold to enter the relevant market and, in combination with the evidence of market shares, suffice at least to meet the plaintiff's initial burden. The latter is then placed upon defendants to rebut the existence and significance of the profitability threshold to entry.

Jackson concluded that the bureaucrats of Microsoft attempted to rebut the presumption of their monopoly power with evidence of both putative constraints on their ability to exercise such power and on their own behavior that is supposedly inconsistent with the possession of monopoly power. None of the purported constraints, however, actually deprives Microsoft of the ability to price its products substantially above the competitive level. Microsoft also has the ability to persist in doing so for a significant period without erosion by a new entry on the Intl OS market or the expansion of the latter. Furthermore, neither the effort of Microsoft's bureaucrats at technical innovation nor their pricing behavior is inconsistent with the possession of monopoly power.

Even if the defendant rebuttal had attenuated the presumption of monopoly power, there is plenty of corroborative evidence of Microsoft's monopoly power: Neither Microsoft nor its OEMs believe that the latter have (or will have anytime soon) even a single, commercially viable alternative to licensing Windows for pre-installation on their PCs. Jackson assumes that economic agents usually have accurate perceptions of economic realities. Moreover, for the past five years, the bureaucrats of Microsoft have comported themselves in a way that could only be consistent with rational behavior for a profit-maximizing corporation, as if they knew that they possessed monopoly power and if they were motivated by a desire to preserve the profitability threshold to enter the market of Intl OS. The proof of Microsoft's dominant and persistent market share, protected by a substantial profitability threshold, together with Microsoft's failure to rebut that the plaintiffs’ showings of the defendant’s monopoly power, have compelled judge Jackson to find as fact that Microsoft enjoys monopoly power in the Intl OS market.

Once it is proven that the defendant possesses monopoly power in a relevant market, liability for monopolization depends on a showing that the defendant used anti-competitive methods to achieve or maintain its position. Prior cases have established an analytical approach to determining whether challenged conduct should be deemed anti-competitive in the context of a monopoly maintenance claim. The pinnacle of this analysis is whether the defendant's conduct is "exclusionary." In other words, whether he has restricted significantly or threatens to restrict significantly the ability of others to compete in the relevant market on the merits of their products and services. Section 2 of the anti-monopoly law directs to discrete situations, in which the behavior of economical bureaucrats with monopoly powers "threatens to defeat or forestall the corrective forces of competition."

If the evidence reveals a significant exclusionary impact in the relevant market, the defendant's conduct will be labeled "anti-competitive." Consequent liability will be also attached, unless the defendant comes forward with specific, pro-competitive business motivations that explain the full extent of his exclusionary conduct. Jackson declined to grant the defendant's motion for summary judgment because factual questions remained as to whether the justifications of Microsoft's bureaucrats were sufficient to explain their exclusionary conduct or were instead merely their pretense. Jackson found that the second element of a monopoly maintenance claim was satisfied by proof of behavior that tends to impair the opportunities of rivals and not to compete on the merits (or does so in an unnecessarily restrictive way).

If the defendant with monopoly power consciously antagonized its customers by making its products less attractive to them (or if it incurred other costs, such as large outlays of development capital and forfeited opportunities to derive revenue from it), with no prospect of compensation other than the erection or preservation of the profitability threshold against competition by equally efficient firms, the Court may deem that the defendant's conduct is "predatory."

Predatory practice involves aggression against business rivals through the use of business practices that would not be considered profit maximizing except for the expectation that actual rivals will be driven from the market, or the entry of potential rivals blocked or delayed, so that the predator will gain or retain a market share sufficient to command monopoly profits, or rivals will be chastened sufficiently to abandon competitive behavior the predator finds threatening to its realization of monopoly profits.

Proof that a profit-maximizing firm took predatory action should suffice to demonstrate the threat of substantial exclusionary effect; to hold otherwise would be to ascribe irrational behavior to the defendant. Moreover, predatory conduct, by definition as well as by nature, lacks pro-competitive business motivation. The evidence indicated that the defendant's conduct was "motivated entirely by a decision to avoid providing any benefits" to a rival supported the inference that defendant's conduct "was not motivated by efficiency concerns". In other words, predatory behavior is patently anti-competitive. Proof that a firm with monopoly power engaged in such behavior thus necessitates a finding of liability under § 2.

In this case, Microsoft recognized relatively early that middle-ware is the Trojan horse that, once having infiltrated the application profitability threshold, could enable rival operating systems to enter the Intl OS market unimpeded. Simply put, middle-ware threatened to demolish Microsoft's coveted monopoly power. Alerted to the threat, Microsoft strove over a period of approximately four years to prevent middle-ware technologies from fostering the development of enough full-featured, cross-platform applications to erode the application profitability threshold. Pursuing this goal, the bureaucrats of Microsoft sought to convince the software developers to concentrate on the Windows-specific Application Programming Interface (API) and ignore APIs exposed by the cross-platform programs that posed the greatest threat (Netscape's Navigator and Sun's Java technology). Microsoft's campaign succeeded in preventing (for several years and perhaps permanently) Navigator and Java from fulfilling their potential to open the market for Intl OS to competition on the quality of their products and services. Because Microsoft achieved this result through exclusionary acts that lacked pro-competitive justification, Jackson deems Microsoft has conducted the maintenance of its monopoly power by anti-competitive means.

The bureaucrats of Microsoft spent $100 million a year developing Internet Explorer and $30 million a year marketing it. They compensated themselves through the constant prices of their Windows OS. They decided to give their browser away free for no valid business or technological reason other than to keep Netscape from making a living on its product. Such a practice constitutes predatory and anti-competitive behavior.

Microsoft Chairman Bill Gates said that his legal team is going to dispute the ruling in the higher court. He also voiced confidence that economics would ultimately prevail over politics.

During a news conference, Gates said: "We have a strong case on appeal." He noticed that an earlier decision of the U.S. court of Appeals in the Microsoft II case said that it is legal to tie the Web browser to the Windows OS. Nonetheless, Gates failed to note that Jackson concluded his decision stating that the earlier decisions in the Microsoft cases were not relevant in the context of this fully-fledged anti-monopoly case.

Continuing, Gates said: "Our success has been built on innovation," and the company's future success is directly tied to its "ability to continue to innovate… innovation will continue to be our number one priority." Gates reconfirmed the economical bureaucrats’ unwillingness to accept any restraints on their ability to develop software in the way they see as "effective." Some of us may know for whom that way is "effective." Some of us can see that the bureaucrats of Microsoft are the richest people on this planet. However, nobody would argue against that, if the Microsoft bureaucrats achieved their wealth with legal means, and not at somebody’s expense.

Comparing the rapid changes in the domestic and global technology markets, Gates noticed that, "it is clear that Microsoft and every other company must be able to compete and innovate" if they are to be successful. However, Gates’ notion of success implies that it is OK to violate the law in order to be innovative and competitive.

Microsoft's CEO Steve Ballmer said that his team of bureaucrats "would love to continue" settlement discussion "if we saw an openness" on the part of the political bureaucrats. Gates also alluded to the political bureaucrats, noticing that "some parties were pushing for extreme measures that were not in anybody's interest." The bureaucrats of Microsoft have vowed to argue their case in a higher court. At the same time, they face more than 100 private civil class-action lawsuits. Those suits will be piggyback riding on the findings and conclusions of law that Jackson has issued. Jackson’s decisions allowed the plaintiffs in those civil class-action lawsuits to start their cases while Microsoft is found "half way there" guilty as a monopoly.

In spite of the evidence, Ballmer denied that consumers were harmed by the anti-competitive deeds of his team, saying "we think they are misguided… consumers have not been harmed," and those private suits "will not distract us from appeal."

Jackson’s second decision is published on the Internet and the final phase of the lower court trial begins. During the third stage of the case ("remedy phase"), testimony will be heard to help judge Jackson decide how Microsoft’s bureaucrats should be punished for their multiple crimes against their fellow-citizens.

In this phase, which probably would last until July, both sides will make arguments and offer witnesses to testify about what the remedy should be. The government is expected to argue that nothing short of a "structural remedy," meaning the breakup of the corporation will be sufficient to prevent the bureaucrats of Microsoft from abusing their economical power in the future. It is expected that the bureaucrats of Microsoft will argue that any breakup of their corporation will "stifle" innovation and "hurt" the technology industry that has been the driver behind the country's present economic expansion.

The remedy phase will finish the case that was started nearly two years ago with the third decision of the lower court. Throughout the trial, the bureaucrats of Microsoft have vigorously denied the charges and said the decision to build the Internet browser into the Windows OS was merely the result of software evolution that offered consumer benefits. The bureaucrats of Microsoft also argued that they do not have a monopoly because they face threats from potential competitors lurking everywhere.

However, judge Jackson saw the real picture, and concluded that the bureaucrats of Microsoft indeed have a monopoly in the Intl OS market, which they brandished to crush those various potential rivals – Netscape, Sun, Apple, Real Network, IBM, and others. Jackson added that the software giant was guilty of anti-monopoly laws in each of the 19 states that joined the U.S. government in the suit.

Taking into consideration the quantity of plaintiffs, their bipartisan vigor to serve the interests of consumers, it is more probable than not that the case will leave the lower court unresolved in its remedial part. Moreover, taking into consideration the importance of the case to further political and economical development of the country, it is more probable than not, the case will go directly to the Supreme Court. If it happens in this summer, then we will have the final solution in this case in the next summer.

Between the years of 1995-99, about 150 million PCs with preinstalled Windows OS had been sold. The price of each Windows OS has been about $89 throughout those years. Even if some OEMs paid $59 for each copy of the preinstalled Windows, we can speculate that the possible remedy to the end consumers can reach about $20-40 from each sold computer with preinstalled Windows OS. It might be amassed to $6 billion. Take into consideration a remedy for our (consumers’) moral damage, our sleepless nights, and our contemplation about incompatibility of our programs – qualitatively, they can significantly overweight our material damage. Take into consideration remedies for the material and moral damages to such firms as Netscape and Sun Microsystems, etc. Take into consideration the clear possibility of breaking up the present bureaucratic apparatus of Microsoft Corporation, and you will get the entire picture of a possible outcome in this case.

04/05/00

P.S. If you want to know more about monopoly in our politics, follow the link -- Anti-Monopoly Laws .

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Victor J. Serge created this page and revised it on 04/13/03