From: http://www.wired.com/news/politics/0,1283,36000,00.html Government Wants Control of MS by Declan McCullagh 3:00 a.m. Apr. 29, 2000 PDT BELLEVUE, Washington -- If Bill Gates was unhappy with early reports of the government's antitrust punishments, he's going to be plenty steamed when he reads the fine print this weekend. In two lengthy filings on Friday, government attorneys said they eventually hope to carve up Microsoft into two huge chunks. But until that happens, their 40KB proposal would impose extraordinarily strict government regulations on what the world's largest software company may and may not do. For instance: * Microsoft wouldn't be able to sell computer makers discounted copies of Windows, except for foreign language translations, but would be ordered to open a "secure" lab where other firms may examine the previously internal Windows specifications. * Microsoft wouldn't be able to give discounts to hardware or software developers in exchange for promoting or distributing other company products. For instance, Microsoft would be banned from inking a discount deal with CompUSA to bundle a copy of Microsoft Flight Simulator with a Microsoft joystick. * Microsoft would have to create a new executive position and a new committee on its board of directors. The "chief compliance officer" would report to the chief executive officer and oversee a staff devoted to ensuring compliance with the new government rules. * If Microsoft hoped to start discarding old emails after its bad experiences during the trial, it wouldn't be able to do so. "Microsoft shall, with the supervision of the chief compliance officer, maintain for a period of at least four years the email of all Microsoft officers, directors and managers engaged in software development, marketing, sales, and developer relations related to platform software," the government's proposed regulations say. * Microsoft would have to monitor all changes it makes to all versions of Windows and track any alterations that would slow down or "degrade the performance of" any third-party application such as Internet browsers, email client software, multimedia viewing software, instant messaging software, and voice recognition software. If it does not notify the third-party developer, criminal sanctions would apply. * State and federal government lawyers could come onto Microsoft's campus here "during office hours" to "inspect and copy" any relevant document, email message, collection of source code or other related information. * The same state and federal government lawyers would be allowed to question any Microsoft employee "without restraint or interference." If U.S. District Judge Thomas Penfield Jackson adopts them, the restrictions will last three years after his decision. The DOJ suggests that they take effect 30 days after Jackson rules, which trial observers expect will happen this summer. It should be no surprise that Gates, Microsoft's chairman, was characteristically testy when reacting to initial news reports of the plan. "People can disagree about some of the issues in this case, but the government's proposals are clearly unreasonable and punitive beyond reason. These regulations are out of touch with consumers and are completely out of proportion to the issues in the case," Gates said. "The net effect of these remedies is that they run against what consumers want: products that are easy to use, work well together, are innovative and affordable." Microsoft's allies, most of which receive money from the company, said much the same thing. "The extreme plan presented this afternoon for the fragmentation of Microsoft is economically, legally, and morally wrong. It would be a disaster for consumers and innovation," said the libertarian Competitive Enterprise Institute. Microsoft's competitors, on the other hand, seemed to like the idea of their chief rival being subject to day-to-day regulation by antitrust officials. "It is an appropriately serious response to the serious harms caused by Microsoft's violation of the antitrust laws," Sun Microsystems said in a statement. Microsoft has, of course, said it will appeal Jackson's order, though the DOJ hopes the regulations will stay in place during that time. While the government stands a good chance of convincing Jackson that its suggestion is a wise one, it likely will have a much tougher time persuading appeals courts. On every important issue so far, a three-judge appeals panel has sided with Microsoft. Microsoft employees seemed not as much shocked by the government's filing as relieved that the uncertainty over what would be in it was finally over. One Microsoft employee said he was simply happy the stock price didn't fall more than it did. Microsoft was trading at 71 in after-hours trading Friday, up 1-1/4 from its close of 69-3/4 in the regular trading session before the announcement. That's down from a recent high of over 110 a month ago. A Microsoft programmer who described himself as a liberal said he's become convinced that antitrust laws are too vague. "They're arguing about what the law is," the programmer said. "Aren't you supposed to know about the law before you spend four years in court?" ##### P.S. 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