Micro$oft Monitor

Published by NetAction Issue No. 34 August 20, 1998
Repost where appropriate. See copyright information at end of message.


Source Code Secrecy and Microsoft's Copyright Monopoly
Welcome NetAction's Intern
About Micro$oft Monitor

Source Code Secrecy and Microsoft's Copyright Monopoly

By , Project Director

On August 6, Microsoft was ordered by U.S. District Court Judge Thomas Penfield Jackson to turn over the source code for its Windows operating system to government lawyers so they could determine whether the company has been using internal structures of the code to illegally expand its monopoly.

Complaining about the decision, Microsoft compared it to being forced to disclose the "software equivalent to the formula for Coca-Cola."

Microsoft seems to have an obsession with Coca-Cola comparisons in a previous court decision involving bundling Navigator as an option with Windows, Microsoft compared this to requiring a six pack of Coke to include Pepsi. Maybe its Microsoft's envy for Coke's stock market capitalization, since it is one of Microsoft's few rivals, or maybe the company really thinks comparisons to a nonessential consumer good with low nutritional value is the best analogy to Windows.

Whatever the reason for Microsoft's obsession, the problems in the comparison just highlight why a secret operating system is so incompatible with both legal and innovation needs in the new economy.

Legally, this comparison just shows how deliberately misleading Microsoft propaganda has been in trying to cloud the legal case against the company. Unlike Coca-Cola, whose rivals are free to try to duplicate the formula and sell it at will (with only employees barred by trade secret law from passing on the formula to anyone else), Microsoft has the full force of copyright protection in preventing anyone from duplicating its software even if every detail was known publicly.

And Microsoft has made much use of the governments' help in enforcing that copyright against those who have pirated its software. Now, the government suspects that Microsoft has abused the copyright protection it enforced, so the government wants to examine the software it previously defended on Microsoft's behalf in order to make sure Microsoft is not using that source code for unfair anticompetitive advantage.

What is amazing is that Microsoft would even try to contest the government's right to review its software after the company took advantage of the government's free legal services to enforce its copyrights.

Microsoft worries that others might also get a peek at its source code. The question, though, is why rivals don't already have the right to review it.

It is an anomaly in intellectual property law that the nuts and bolts of a piece of software's design is not publicly available. Traditional works protected by copyright, like books and music, wear their design literally in their text and in their musical notes, available to any fellow artist to study and improve upon. Similarly, creators of traditional technology protected by patents are required to file the details of how an innovative technology functions in order to obtain patent protection.

All of this is in line with the goal of patent and copyright protection, detailed in the U.S. Constitution, to "promote the progress of science and the useful arts." This goal was traditionally met by protecting intellectual property in two ways: innovators were compensated for their work and thus had an incentive to produce it, while, just as importantly, they were required to register their work publicly so other innovators would have full access and could attempt to create an improved version.

Software has never fit comfortably within this scheme, since most software innovations are too incremental to meet the standards of fundamental innovation protected by patents. Yet those innovations are not really of the same character as artistic creations.

Still, as long as most software was generally made up of discrete programs running independently, copyright protection was generally both economically and technologically useful.

However, as software is increasingly designed to work in conjunction with other software, especially as networked computing explodes due to the Internet, the secrecy of source code allowed under copyright increasingly obstructs innovation in fundamental ways.

In the case of Microsoft, we increasingly see that innovation is endangered as a result of this source code secrecy. That's because Microsoft controls the operating system needed to make other desktop software work, and the company is seeking to control the browser software that all Internet software needs to function.

Early in the 1990s, a number of analysts called attention to the way Microsoft developers could use inside knowledge of the source code for Windows to give its applications developers an advantage over rivals. Not only did this give an anticompetitive advantage to Microsoft, the fact that all programmers do not have full access to knowledge of the operating system and cannot innovate as fully has meant a general loss for consumers. Because the functions of the operating system are integrated behind source code secrecy, it becomes very hard for anyone else to improve some aspect of its functioning without replacing the whole Windows operating system in toto.

At one level, the opposition to Microsoft bundling Internet Explorer into Windows is not just the fear that Microsoft will add to its desktop monopoly but that a whole new set of functions, namely access to the Internet, will disappear into source code secrecy. As long as the browser was a separate piece of software from the operating system, all competitors had a somewhat level playing field, at least in regards to programming options, for integrating Internet functions into desktop computing.

By definition, since no one else can access the operating system source code directly, Microsoft has no competition in integrating Internet functions into the core of the operating system. The bundling of browser functions into the operating system is therefore the death of competitive innovation in fundamental aspects of Internet functionality.

The alternative would be a world where source code was public and programmers were free to create innovative additions to the core operating system. As detailed in the last Microsoft Monitor, there is a whole array of open source software, including the Linux operating system, where this is the reality. The result is software that is generally considered more innovative and robust than commercial software where only a limited number of programmers have access to secret source code.

Now, Linux is not going to supplant Windows anytime soon, although it is making impressive gains. But its continuing innovation by a broad range of programmers demonstrates what is lost by source code secrecy in Windows.

By revealing the source code of its Internet browser and encouraging others to innovate improvements, Netscape has made an encouraging step in the direction of open source computing, and Microsoft should be encouraged to follow suit.

Many remedies for Microsoft's monopoly dominance have been discussed. Ordering Microsoft to reveal its source code should be seriously considered by the Justice Department and state Attorneys General as one aspect of that solution. While Microsoft would in no way lose its current copyright protection against piracy, competitors developing applications or operating system variations, including software for Internet access, would be in a much better position to fairly compete with Microsoft's own in-house programmers.

If competitors could freely create innovative substitutes for different functions of the Windows operating system, many of the concerns about Microsoft would be lessened. Competition and innovation would be enhanced a net plus for consumers in every way.

Copyright's protection is intended to enhance innovation. Where secrecy serves instead to reinforce monopoly interests, it should give way to open source code where all competitors can compete with a level playing field of knowledge.

Here are some resources for more information on open source options in the computing world:

There is also more information on NetAction's site at:


For comments and questions about this article, contact Nathan Newman at

Welcome NetAction's Intern

Mitch Stoltz, a fourth year student at Pomona College in Claremont, is joining NetAction on September 1, 1998, for a semester-long internship. Mitch is majoring in Public Policy Analysis with a self-designed focus on technology issues, and he will be working on policy issues involving the Internet and the software industry.

In addition to public policy, Mitch has a background in programming and has worked at Sandia National Labs at the University of California, Berkeley, and more recently at Netscape.

His policy studies last year focused on privacy, and the competing interests of government and industry regarding encryption software. His work at NetAction will include looking at technical standards and open source software. Last year, as a volunteer, Mitch provided research assistance for NetAction's first survey of web browser choices for customers of the largest Internet service providers.

Beginning September 1, contact Mitch at: .

About The Micro$oft Monitor

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