The Register has posted an article about Microsoft gets green light to punish OS-less PC vendors.

The Microsoft antitrust settlement - dubbed a "Seattlement" by one reader because of the generous terms - is to be reviewed by Judge Colleen Kollar-Kotelly, this week. But lawyers at the Department of Justice and the settled States have already been indicated that they're not altogether happy with Microsoft's compliance to the arrangement they signed 14 months ago.

Does this signal a new bout of activism at Ashcroft's DoJ? Have the lawyers drunk a dose of Spitzers?

That's hardly likely, as we'll see. But in one little-noticed finding in the most recent compliance status report issued last week, Microsoft has been allowed to withhold rewards to OEMs who ship a PC without an operating system installed. Microsoft argues that this is a necessary sanction to discourage piracy. But equally, it's a disincentive for corporate purchasers who want to ghost an image of Linux onto a pre-specced PC.

Microsoft specifies this condition in what's called an MDP, or Market Development Program, although for most of its history it's been known as an MDA, for Market Development Agreement.

MDPs and MDAs

In testimony during the DoJ's antitrust case, IBM alleged that Microsoft used the MDA as a kind of pre-nuptial agreement that dictated the terms of the pricing structure, before formal negotiations over Windows licensing could begun. For example, in October 1994 Microsoft offered IBM an MDA that listed up to $27 per license in potential discounts, if IBM met certain conditions. The more points in the MDA that IBM agreed to, the lower the price became. IBM was then promoting its OS/2 operating system as an alternative to Chicago, which was released as Windows 95 ten months later.

IBM decided it could only qualify for $8 worth of these. The MDA set the price for Windows 95 at $75 - a hefty increase over the $9 IBM was paying for Windows 3.11, claimed IBM. For making Windows 95 the default OS, IBM alleged, Big Blue would earn a royalty reduction of $3. (Microsoft argued that none of the MDA terms prevented OS/2 being preloaded, and that IBM was itself trying to negotiate better terms for NT 4.0 royalties.)

The full article can be found at The Register

Source: The Register

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