Few criticize Microsoft deal

SAN JOSE, Calif. -- Not many high-tech companies talk openly about the proposed Microsoft antitrust settlement. Even fewer criticize the deal in public, despite private misgivings.

They still, after all, must work with the world's largest software maker, which controls the operating systems of more than 90 percent of desktop computers and can play a big role in the fate of their businesses.

The exceptions are the usual suspects -- mainly those companies that possess enough clout, money and muscle to risk a run-in with the software giant.

The most outspoken critics include database powerhouse Oracle Corp. and Unix server king Sun Microsystems Inc. Both dominate their core markets despite Microsoft's efforts.

Larry Ellison, Oracle's billionaire chief executive, told a crowd at the Comdex computer show in Las Vegas this month that the settlement is "a complete victory for Microsoft, a complete defeat for the government. I give Microsoft credit for keeping a straight face."

Sun's chief, Scott McNealy, also expressed outrage that the Department of Justice -- after winning the case -- seemed to snatch defeat from the jaws of victory.

The deal is riddled with pro-Microsoft loopholes and indicates government unwillingness to police antitrust crimes, critics say.

Microsoft declined to answer specific questions about the deal, but co-founder Bill Gates has said the company will accept its strictures.

Most companies that must work with or compete against the software giant either refused to elaborate beyond short written statements, or remained silent altogether.

Seattle-based Real Networks, which makes streaming media software, declined to comment beyond a short statement, which called the settlement a reward, not a remedy. Ditto for AOL Time Warner, Palm and Novell. Others, including software-maker Adobe Inc., computer-maker Apple Computer Inc. and chipmaker Intel Corp. refused to make any statements at all.

Major PC manufacturers also were silent.

"They're all dependent," McNealy said in an interview. "It's kind of like the mob -- you can't speak out."

But a handful of other high-tech companies did discuss specific reasons they oppose the settlement.

Opera Software had little to lose.

The Norwegian company long ago gave up on persuading PC makers to install its critically acclaimed Web browser on new PCs. Microsoft's exclusive deals had already shut it out of the market.

Opera might benefit from the settlement under some provisions that allow computer makers to install non-Microsoft "middleware" such as Web browsers. But only the links to Microsoft software could be removed, not the programs themselves. That means Microsoft could set itself up as the default system despite any agreements with PC and software makers.

"We're not being extremely hopeful that this is going to open up a lot of doors in the PC marketplace," said Jon von Tetzchner, Opera's chief executive.

Even if retribution is barred in the settlement, some software makers are worried about it.

"There are loopholes," von Tetzchner said. "And there's the practice of life. All of those companies will think twice before upsetting Microsoft."

The entire debate over what Microsoft can do and cannot do appears to be rendered moot: Under the settlement, Microsoft can define what comprises the Windows operating system "in its sole discretion."

Competitors complain that because Microsoft was not compelled to immediately reveal to them how to link its operating system with the programs that run on top of it, it will continue to dominate in such areas as word processing, spreadsheets and e-mail.

"This settlement does not remedy the monopoly. It legitimizes it," said Michael Tiemann, chief technical officer at Red Hat Inc., a distributor of a variant of Linux, a competing operating system.

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