X-Sender: mcooper@mail.essential.org X-Mailer: QUALCOMM Windows Eudora Version 5.1 Date: Thu, 25 Oct 2001 12:22:58 -0400 To: declan@well.com From: Mark Cooper <mcooper@consumerfed.org> Subject: Press Release: Leading Consumer Watchdogs Call Windows XP "Illegal Extension of Microsoft Monopoly", Urge Strong Remedy in Antitrust Case

To: Declan McCullagh Washington Correspondent Wired News

CONSUMER FEDERATION OF AMERICA CONSUMERS UNION

Leading Consumer Watchdogs Call Windows XP "Illegal Extension of Microsoft Monopoly", Urge Strong Remedy in Antitrust Case For Release 12:15 p.m., EDT Thursday, October 25, 2001

Contact Mark Cooper of CFA at 301/807-1623 Chris Murray of CU at 202/462-6262

(Washington, D.C., Thursday, Oct. 25, 2001)-Responding to the official launch of Windows XP, two of the nation's leading consumer organizations today reiterated their concerns about the anticompetitive and anti-consumer aspects of Microsoft's new bundle of software and Internet services. The groups concluded that it is an illegal extension of the company's illegal monopoly, and which will cause significant harm to both the nation's consumers and non-Microsoft-affiliated software firms and Internet service vendors. Christopher Murray, CU's Internet and Telecommunications Counsel, said, "We want to be clear that in contesting Microsoft's latest product we are not taking an 'anti-innovation' position. It is precisely because we are pro-innovation that we are disappointed with the way in which Microsoft is telling users, 'If you want one-click convenience, we'll give it to you, but only to our affiliates and commercial partners. Forget about one-click convenience anywhere outside of our walled garden.' Mark Cooper, Director of Research for CFA, added, "The real issue with XP is whether innovation will be driven by a vigorous competitive process or managed by a single, dominant firm that can choose, at any moment and with a vast and ever-expanding store of anti-competitive tactics, to protect and promote its interest at the expense of consumers."

The groups, following up on a report they released last month that describes in detail continuing Microsoft anti-competitive practices, cited the following central objections to Windows XP:

* Passport, Microsoft's payment and ID authentication service, should not be bundled with XP. Users should have a choice of authentication systems and Microsoft should provide customer support without users having to sign up for a Passport;

* Microsoft should provide an "open" alternative to the world of Microsoft-affiliated commercial partners. Users should be able to easily reconfigure one-click features on Internet Explorer 6 (the browser bundled with XP) such as "My Music," and "My Photos," to point to non-Microsoft services;

* Windows Media Player, the music and video player bundled with XP, should provide support for high-bitrate MP3 music, rather than eschewing that format in favor of Microsoft's proprietary "Windows Media Audio" format; and

* "pre-certification" of all software drivers, while helpful to maintain platform stability, has enormous potential for anti-competitive abuse.

Cooper concluded, "We are heartened to learn of the apparent decision by some state prosecutors to hire a hard-nosed lawyer during settlement talks. State and federal prosecutors need to vigorously pursue a strong remedy to stop current and prevent future anti-competitive behavior. Any remedy sanctioned by the courts needs to be closely monitored, and Microsoft should be substantially penalized if it fails to comply, either financially or even, as a last step measure, break up of the company."

The Consumer Federation of America is the nation's largest consumer advocacy group, composed of two hundred and eighty state and local affiliates representing consumer, senior, citizen, low-income, labor, farm, public power and cooperative organizations, with more than fifty million individual members. CFA is online at http://www.consumerfed.org/.

Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only consumers. CU is comprehensive source for unbiased advice about products and services, personal finance, health and nutrition, and other consumer concerns. Since 1936, CU's mission has been to test products, inform the public, and protect consumers. CU's income is derived solely from the sale of Consumer Reports and its other services, and from noncommercial contributions, grants, and fees. CU is online at http://www.consumersunion.org/.

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