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“I am concerned that the enforcement mechanism described in the proposed decree lacks the power and the timeliness necessary to inspire confidence in its effectiveness.” -Sen. Patrick Leahy, D-Vt. “The proposed decree contains some of the most stringent enforcement provisions ever contained in any modern consent decree.” -Charles James, Assistant Attorney General Antitrust Division Like two ships passing in the night, those who support the Department of Justice’s proposed settlement with Microsoft speak an entirely different language than those who oppose the settlement. On no issue is the divide wider than the respective camps’ interpretation of the enforcement provisions. Microsoft’s critics pull no punches. The enforcement provisions, they say, are weak, ineffective, and utterly incapable of stemming the software giant’s anti-competitive conduct. Is there any truth to their attack? In every antitrust case, competitors play a role in urging the government to prosecute the target. So too here. Microsoft’s rivals have been aggressive in pushing their own agenda on the DOJ and the states involved. Their advocacy has generated reams of critique of the settlement. While much of that criticism is simply an expression of frustration and a wish that harsher remedies be imposed on Microsoft, some of it is thoughtful and potentially useful. But even the constructive criticism fails to recognize a larger principle here: The goal of the settlement, and its enforcement provisions, is not to pound Microsoft into submission. It is to effectuate the settlement and establish a procedure that ends this dispute once and for all on terms that everyone can live with. Measured by the yardstick of whether they back up the substantive elements of the settlement agreement, the enforcement provisions are strong, effective and creative. While their unusual nature has spawned criticism, it is that very nature that may well make this settlement work. A COMMITTEE WITH ACCESS There is no question that the enforcement provisions of any consent decree are important in ensuring the success of that decree. The best provisions are ones that effectively enforce the substance of the settlement and thereby minimize the need for litigation to effect compliance. And there is serious concern about future litigation in the Microsoft case. It is not just the acrimony between the litigants (and between Microsoft and its competitors) that makes future disputes a possibility. The very nature of the settlement presents difficult enforcement issues. One of the most sensitive areas of the settlement is Microsoft’s obligation to provide technical information sufficient to permit non-Microsoft middleware to interoperate with the Windows operating system. The question of how much technical information is necessary to achieve interoperability will likely be hotly contested. (Indeed, the issue is the subject of an entire European Commission proceeding between Microsoft and its rivals regarding server software.) Microsoft is justifiably concerned that its competitors will use the interoperability provision to delve as deeply as they can into its proprietary source code, seeking valuable data that goes far beyond what they actually need to interoperate. The competitors fear that Microsoft will not reveal enough code to make their products work with Windows as well as Microsoft’s own products do. When the inevitable disputes arise, who will resolve them? ENTER THE TECHNICAL COMMITTEE Central to the enforcement provisions, an independent three-person Technical Committee, made up of experts in software design and programming, will be established. This committee will have permanent offices at Microsoft’s Redmond, Wash., campus. Its sole function will be to monitor and resolve disputes regarding the company’s compliance with its obligations under the Final Judgment. The committee’s expenses will be paid by Microsoft, including the fees of any consultants it needs. The Technical Committee will have complete access to all Microsoft documents, computer programs, personnel, equipment, and physical facilities. Committee members may direct Microsoft to prepare reports on any information and in any format the committee desires. Most significantly, the committee will have complete access to Microsoft’s confidential source code. The committee may study and interact with the code to ensure that Microsoft is complying fully with the Final Judgment. Any company employee may be interviewed regarding the code and its operation. In sum, there is no loophole or exclusion that will prevent the Technical Committee from obtaining any piece of information in any way related to Microsoft’s compliance with the settlement. SILENCE OF THE ENFORCERS The most important function of the Technical Committee will be to resolve complaints about Microsoft’s compliance. Any person — not just the DOJ or the states — may submit an issue for investigation. In this regard, the committee will act as a mediator, interacting with both Microsoft and the complainant in an effort to resolve the dispute. The only limitation placed on the committee’s work is that its findings or recommendations in these informal dispute proceedings may not be admitted as evidence in court, nor may committee members be called to testify. While some have criticized this confidentiality provision, it is actually a major strength of the settlement agreement. Confidentiality frees the committee to use every method possible to resolve disputes without fearing that what might be very sensitive negotiations will be made public. Protecting members from having to testify is also consistent with the rules of every mediation procedure undertaken within the U.S. legal system. It encourages parties to be fully candid and forthcoming before the committee. The recently drafted Uniform Mediation Act expressly acknowledges that confidentiality is critical: “The Drafters recognize that mediators typically promote a candid and informal exchange regarding events in the past, as well as the parties’ perceptions of and attitudes toward these events, and that mediators encourage parties to think constructively and creatively about ways in which their differences might be resolved. This frank exchange can be achieved only if the participants know that what is said in the mediation will not be used to their detriment through later court proceedings and other adjudicatory processes.” Confidentiality means that most disputes over compliance with the Final Judgment will be resolved through negotiation. At the same time, the confidentiality restriction does not interfere with the Technical Committee’s responsibility to inform the DOJ and the states of any violation, explain the details of that violation, and provide supporting evidence. Indeed, the committee has an obligation to report its activities to the plaintiffs at regular six-month intervals. And if the committee has reason to believe that a violation has occurred, it is obligated to report that fact immediately to the plaintiffs and provide a written summary of the nature of the violation. STEPPING GINGERLY Critics have attacked the Technical Committee concept and proposed instead a traditional special-master provision. But United States v. Microsoft is not a traditional case. In a consent decree that consists primarily of “cease and desist” provisions, a special master may be more appropriate. A special master typically acts like a judge and is empowered to investigate matters related to compliance and make findings of fact and conclusions of law. Those findings and conclusions are usually adopted by the court. A special master’s responsibilities are thus inconsistent with mediation and negotiated resolution of disputes in technically difficult areas such as interoperability. Another criticism of the Technical Committee is that one of the three members is selected by Microsoft. But this is consistent with the selection methodology of arbitration panels in general and ensures a diversity of viewpoints on the committee. In essence, such equal representation will serve to validate actions taken by the committee in the eyes of Microsoft and its rivals. BACK TO COURT Add up all the important factors, and the Technical Committee shows itself to be a unique and potentially effective way to resolve enforcement disputes and avoid years of litigation over compliance. But even its existence does not preclude the DOJ or the states from bringing enforcement matters directly back to court if they wish. Indeed, the Final Judgment specifically provides that the United States and the individual states involved in the case have responsibility for enforcing the judgment. The plaintiffs have the right to: inspect all books, records, ledgers, or any other document within Microsoft’s control; inspect Microsoft’s source code; interview any Microsoft employee (and record such interview); and order Microsoft to prepare any report under oath regarding any matter in the Final Judgment. These provisions give the plaintiffs essentially unfettered ability to obtain any piece of information they seek with respect to Microsoft’s compliance. There is no loophole or exception that would prevent them from acquiring relevant information. And if they suspect a violation, the plaintiffs may immediately initiate a contempt proceeding against Microsoft in the U.S. District Court, which has ongoing jurisdiction to enforce the terms of the Final Judgment. In sum, the extensive access that the Technical Committee has to Microsoft information under the settlement agreement and its obligation to report perceived violations of the Final Judgment to the DOJ ensure that this informal complaint procedure will not be a dead letter. The committee can make life very difficult for Microsoft, which adds to the company’s already significant incentive to satisfy the committee and avoid compliance issues altogether. And the committee’s role as confidential mediator will provide for quick resolution of complaints against Microsoft — typically far quicker than if a contempt proceeding were initiated. We know that disputes regarding Microsoft’s obligations under the Final Judgment are inevitable. If the DOJ, the states, Microsoft’s competitors, and Microsoft all act in good faith, the enforcement mechanism in the settlement provides the best way to resolve those disputes without having to try this case over and over again. If one or all of the parties acts unreasonably in carrying out the settlement, the details of the enforcement mechanism are not so important: Then, no matter how you slice it, the parties will be back in court fighting about this case for years to come. Lars H. Liebeler is a founding partner at Washington, D.C.’s Thaler Liebeler and practices in the areas of commercial and technology law. He provides antitrust counseling to the Computing Technology Industry Association and co-authored an amicus brief on CompTIA’s behalf in United States v. Microsoft. CompTIA supports the proposed settlement in that case.

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