DOJ: News Release

McGrath, Attorneys General: Microsoft’s New Windows XP “Anti-Competitive”

HELENA – On Thursday, Montana Attorney General Mike McGrath joined the attorneys general of five other states and signed a letter to software giant Microsoft urging it to remedy the anti-competitive issues associated with the release of a new operating system.

The letter to Microsoft President Steven A. Ballmer specifically addresses Windows XP, a new operating system due for release next month. The letter charges that Windows XP “may involve additional unlawful attempts by Microsoft to maintain its operating system monopoly.”

“The construction of Windows XP seems to ignore many of the legal rulings in this case,” McGrath said. “Along with my colleagues from across the country, I hope Microsoft will deal with the anticompetitive pieces of the new operating system and take into account important consumer choice and privacy issues.”

Among those legal rulings are “conduct remedies” put forth by the U.S. District Court in June 2000. One of those remedies barred Microsoft from including certain software in Windows unless computer makers and consumers could remove it. The XP set-up appears to fly in the face of that remedy, however, as it comes bundled with Microsoft software that includes a Web browser, video-editing software and an Internet telephone service.

McGrath also said that Passport, Microsoft’s online authentication system, may compromise consumer privacy. Passport uses one secure ID and password to access a number of sites and services for consumers.

“Tying Passport to the XP operating system raises some profound issues regarding consumer privacy,” McGrath said.

The attorneys general signing the letter “are supportive of efforts of the litigating states and the Department of Justice to incorporate Windows XP into the remedy phase of the remanded case.”

The letter also expressed concern that many government offices use existing versions of Windows and Microsoft could withdraw support for those products in favor of Windows XP.

The letter supports the U.S. Department of Justice and 18 state attorneys general currently suing Microsoft. The suit, initially filed in 1998, alleged that Microsoft had monopoly power in the operating system market and that it had engaged in illegal practices to maintain that monopoly. Just last week, the U.S. Department of Justice abandoned efforts to break Microsoft into smaller companies but has continued to pursue its case regarding the conduct remedies.

The AGs signing the letter to Ballmer are from smaller states that have not joined the lawsuit, primarily because they lacked the resources. McGrath said although he is signing the letter to Ballmer, Montana has not yet entered into any litigation against Microsoft.

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