Monopoly in the dock

Bill Gates visits India fresh from a legal victory. But he faces a stiffer challenge from the advocates of "free software".

THE opening motif of Bill Gates' third visit to India early in November was philanthropy. But the chairman and chief software architect of Microsoft Corporation, a man shadowed by the appellation the "World's Richest", lost little time moving to the business end. The bounty promised for India, whose burgeoning software industry earned rich praise, was $400 million in Microsoft investments over the near future. Together with invoking the mantra of "localisation" or closer adaptation of Microsoft products to local requirements, Gates promised a scaling up of the company's direct software effort in India and an intensification of its collaborative programmes, notably with Infosys Technologies and Wipro Infotech of Bangalore. Much of the added impetus is expected to come in the domain of the Web-oriented programming language Microsoft.Net (or simply .Net), which Gates has been promoting as the standard for the next phase in the evolution of the global digital economy.

Gates had good reason to feel munificent. On November 1, Judge Colleen Kollar-Kotelly of the United States District Court in the District of Columbia approved most of the provisions of an anti-trust settlement proposed last year between Microsoft and the U.S. Justice Department. Threatened with a break-up as recently as June 2000, Microsoft has got off rather lightly. The court ruled that a "structural remedy" would not be necessary since the Microsoft monopoly was not "illegally acquired" but only "illegally maintained". The appropriate remedy in this case should focus not on terminating the Microsoft monopoly, but only on regulating its corporate behaviour. And with this preamble, the court prescribed a number of restraints, which in their cumulative scope leave considerably less room for competitors to challenge the Microsoft monopoly.

By a curious coincidence, Gates' travel itinerary in India coincided with that of Richard Stallman, an acknowledged guru of the "free software" movement. Stallman attracted little public adulation and drew audiences that were less than modest. But he delivered a powerful message while releasing a book of essays on the free software movement.

For Stallman, one of the principal authors of the GNU/Linux operating system, "free software" means much more than software obtained gratis. In fact, it refers to four kinds of freedoms: the freedom to run a program for any purpose; to study how the program works and adapt it to one's needs; to redistribute copies so that one's neighbours can benefit; and to improve the program and release one's improvements to the public.

By these criteria, said Stallman, the June 2000 decree enjoining Microsoft to release a few of its proprietary software codes was a "fraud", since it restricted the number of beneficiaries and enabled the company to sign various kinds of "non-disclosure agreements" with them. And the latest settlement, which considerably waters down the transparency requirements imposed on Microsoft, is little short of disastrous.

Nine States have joined the U.S. Federal Government in the settlement with Microsoft. Nine other States have opted out and are reportedly studying their legal options. Two of Microsoft's competitors - Sun Microsystems and AOL Time Warner (which holds the rights to the Netscape Navigator web-browser) - have asserted their determination to appeal. In addition, Microsoft still faces an anti-trust inquiry by the European Commission for persistently breaching competition rules.

The case against Microsoft, begun in 1998, was decided on both matters of fact and law by May 2000. In decreeing the remedy in June 2000, Judge Thomas Penfield Jackson held that Microsoft's conduct revealed its "untrustworthy" character. Jackson recorded that he had "reluctantly come to the conclusion that a structural remedy (was) imperative", since Microsoft, under its existing management, was unwilling to admit that "it broke the law".

The structural remedy proposed was the splitting of the company into two independent entities, one of which would hold the licence for the operating systems software, leaving applications development to the other. Where the restraints on future monopolistic conduct were concerned, the Judge decreed that Microsoft should make public the technical details of its software that would enable applications developers to interface with its operating systems. In the technical jargon, Microsoft was obliged to expose a sufficient number of "applications programming interfaces" (or APIs) on its Windows operating system, to allow applications developers to plug in and invoke the software codes that would otherwise remain hidden.

Details of the structural remedy remained to be worked out - in particular, the distribution of assets and technology between the two anticipated offspring of the Microsoft split and the containment of the inevitable havoc in the stockmarket. The challenge was obviously daunting and in the interests of restoring some amount of stability to a vital sector of the U.S. economy, Jackson invoked a little-used law to refer the case directly to the Supreme Court. In a ruling that was not entirely free of controversy, the Supreme Court declined the reference and lobbed it back to the Appeals Court. Although he did not issue an individual opinion in the matter, Chief Justice William Rehnquist took the extraordinary step of explaining why his son's partnership in a law firm defending Microsoft in a separate batch of anti-trust lawsuits did not entail any conflict of interest issues warranting his withdrawal from the hearing.

Early in 2001, the U.S. Court of Appeals upheld Judge Jackson's findings of fact, altered his findings of liability and rejected his remedy decree. Finding Jackson's conduct "inappropriate", the Court reassigned the case to another forum for working out an alternate decree. In November 2001, the Justice Department under the decidedly more monopoly friendly management of John Ashcroft, President George Bush's appointee as Attorney General, worked out an alternative proposal and submitted it for judicial approval. After month-long hearings and judicial deliberations for over six months, this has been endorsed in essence by Judge Koller-Kotelly.

The settlement limits the number of APIs that Microsoft would need to document and publish for the benefit of independent software vendors. Further, it restricts the definition of "middleware", which is a term that refers to the category of software that "relies on the interfaces provided by the underlying operating system while simultaneously exposing its own APIs to developers".

Two categories of "middleware" embodied a special kind of threat to the Microsoft monopoly. The first was Netscape Navigator, the Web-browsing software that depended on the interfaces provided by the Windows operating system, but also provided a number of its own APIs, where prospective developers could seek to connect for a variety of Web-based applications. As Judge Jackson recorded in his "findings of fact", the threat that Netscape could erode the Microsoft monopoly was only putative. But Microsoft had additional reasons to worry when Netscape tied up with Sun Microsystems, inventors of Java, in May 1995. Java is a term that refers to four different elements of software programming, but the final objective of these is to provide the means for writing application programs that will run on a variety of platforms. If fully successful - and this still remains a distant prospect - Java would enable free transfer of information between different operating systems, without the need for expensive and time-consuming "porting".

Microsoft sought to forestall this threat by first seeking to negotiate Netscape out of the browser market for the Windows environment and then by subverting the full potentialities of Java by transforming it into a predominantly Windows-based programming language. Thwarted in both these efforts - in the second case by judicial intervention - Microsoft launched its own Web-browser as a free offering with its operating system, and began pressuring computer vendors licensed to offer Windows, to delete the Netscape Navigator option.

These tactics had a serious effect on the commercial fortunes of both Netscape and Sun. The recent settlement effectively puts an end to their competitive status by recognising only those middleware products that could serve as "platforms for applications'' and sold "at least one million copies'' in the U.S. over the previous year. And developers seeking to interface GNU/Linux-based applications have effectively been shut out, since Microsoft would be obliged to reveal APIs for "the sole purpose of inter-operating with a Windows Operating System Product''.

EVEN when judicial opinion seemed to be running against him, Gates seemed all insouciance. Within two weeks of Judge Jackson's 2000 decree, Microsoft announced its ambitious .Net initiative, which observers pointed out was a fairly transparent effort to "extend its Windows dynasty into the Internet era". The scepticism was in no way diminished by the suspicious resemblance that the .Net concept bore to the networked computer vision for long promoted by Microsoft competitors such as Sun Microsystems, Oracle and Netscape.

Responding to these queries, Microsoft president Steve Ballmer clarified a crucial distinction. While Sun and its collaborators had opted for the Java programming language, Microsoft had unequivocally committed itself to XML, or extendible markup language. XML is a further refinement of HTML (or hypertext markup language), which made the Internet possible. It was evolved by a group of scientists at the Worldwide Web Consortium (W3C) based at Cambridge, Massachusetts, which is the acknowledged custodian of technical standards for the Internet.

Software experts familiar with Microsoft's commercial strategies remained unconvinced about the depth of its commitment to non-proprietary standards such as XML, and the Java experience affords ample grounds for these suspicions.

In September 2000, Gates flew in for a rushed visit to Delhi, where he unveiled the .Net concept before a fawning audience and announced a tie-up with Infosys. The promotional effort by Microsoft now features Infosys chairman N.R. Narayana Murthy endorsing its latest software offering, the Windows XP, in a splash of newspaper advertising. One shows Murthy, an icon of the Indian software boom, affecting a naivete that even a casual observer of the industry would find strange. "When I saw Windows XP in action, I was amazed," he says, since Microsoft seemed with uncanny prescience to have got hold of his "wish list" of all that good software should be.

Murthy is certainly not alone in his adulation for Microsoft's developmental prowess. But there are several people who advocate a vigorous push to information technology in common administrative tasks and do not share his enthusiasm. The Bangalore-based Simputer group, for instance, has developed a low-cost hand-held computer that functions on the GNU/Linux standard and has been making a credible case for its use as a tool of e-governance. The Department of Information Technology in the Central government has also drawn up the preliminary outlines of a major GNU/Linux-based initiative in administration.

Officials who were asked about these specific initiatives in the context of the Gates visit preferred to reserve their comment. Microsoft undoubtedly has a large and powerful constituency within the Central and State governments. But Stallman's recent presence in India and his determination to revisit the country at an early date are significant pointers to the emergence of a different kind of thinking. It has been rather easy for industry watchers to disdain the kind of zeal that Stallman brings to his mission. But the charge of Quixotism may not stick when participants in the digital economy confront the risks of ceding their autonomy to a giant corporation that has shown few scruples in its relentless pursuit of monopoly.