Microsoft Witness Hits Interoperability
Despite his criticism for the settlement proposal, Elzinga depicted the states' alternative remedy proposal as the worse of two potential evils. Both proposals encompass costs to consumer welfare, he said.

Among the proposed federal settlement provisions that the professor criticized are requirements regarding uniform licensing terms, communications protocol disclosure, anti-retaliation and OEM removal of end-user access to Microsoft middleware.

Microsoft retaliation against OEMs that it does not look favorably on is not necessarily bad for consumers, Elzinga testified. When Kuney asked him whether he was aware that other witnesses called to testify on Microsoft's behalf said it was unclear whether Microsoft could engage in the kind of retaliation it used against Apple when Apple chose not to promote Microsoft middleware, Elzinga said he was not familiar with that testimony.

Requiring Microsoft to disclose communications protocols for Windows could possibly reduce consumer welfare by serving as a disincentive to innovate, according to Elzinga. If Microsoft had to give away its technology to rivals, it would be less inclined to invest in research and development to create new technologies, he said, adding that rivals might use the anti-trust laws to procure new technologies rather than innovating themselves.

"To the extent that either of the remedies . . . permits an [intellectual property] grab by Microsoft's rivals . . . then that sets up a very problematic incentive structure," Elzinga said.
http://www.eweek.com/article/0,3658,s=701&a=26616,00.asp