Tech Industry

Week in review: Antitrust again

Just as it seemed Microsoft was finally making headway in putting antitrust troubles behind it, the software giant again found itself accused of anticompetitive behavior.

Just as it seemed Microsoft was finally making headway in putting antitrust troubles behind it, the software giant this week again found itself accused of anticompetitive behavior.

Streaming media provider RealNetworks sued Microsoft on antitrust charges, accusing the software giant of illegally using its Windows monopoly to limit consumer choice in digital media. The lawsuit alleges that Microsoft has wielded its "monopoly power to restrict how PC makers install competing media players while forcing every Windows user to take Microsoft's media player, whether they want it or not."

Real's damages could exceed $1 billion, measured in lost business stemming from Microsoft's actions. Real said its lawsuit is complementary to the European Commission's ongoing investigation of Microsoft's business practices, which Real is cooperating with.

Analysts said there were a number of reasons Real may have decided to act now, among them the European Union's investigation of Microsoft. The focus of that investigation has included complaints about Windows Media Player that are similar to Real's accusations.

"This is a very interesting time, in that RealNetworks has gotten a front-row view in Europe, and there's a sentiment that Microsoft is really exposed over there," said one senior analyst. "The case has already been vetted in Europe."

Canning spam
Microsoft also filed a few lawsuits, as the software giant and New York Attorney General Eliot Spitzer took aim at spam. In conjunction with Spitzer's office, the software giant filed several suits against a New York-based spamming ring allegedly responsible for sending billions of illegal and deceptive e-mail messages.

Synergy6, an e-mail marketing company based in New York, and Scott Richter, president of OptInRealBig.com, are among the defendants named in the six suits. Richter has been named one of the world's largest spammers. Authorities allege that Richter and accomplices in Washington, Texas and New York are responsible for seven illegal spam campaigns.

The suits came as President Bush signed the first federal law regulating spam, a move backers say will be a major step in the war against e-mail solicitations for pornography, Viagra, diet pills, get-rich-quick schemes and the like. But critics scoff that e-mail users will be unlikely to see a decline in the volume of junk in their in-boxes.

The complex set of rules will take effect Jan. 1, and will govern how companies may communicate with customers they already know and with those they don't. Falsified e-mail headers could be punished with prison terms, as could sending "sexually oriented" e-mail that is not properly labeled.

But porn spam no longer appears to be the greatest threat to in-boxes. A new study showed that unsolicited e-mail messages relating to health increased significantly last month, while pornography-oriented spam actually decreased over the same period. The study found that health care-related messages accounted for nearly 50 percent of all spam in November, compared with 27 percent in October.

Playing the Net
Also on the legal front: A federal appeals court handed a serious setback to the record industry's strategy of tracking down and suing alleged file swappers.

Overturning a series of decisions in favor of the Recording Industry Association of America, the Washington, D.C., court said copyright law did not allow the organization to issue subpoenas for the identity of file swappers on Internet service providers' networks.

The decision did not address the legality of the lawsuits that have already been filed against hundreds of individual computer users.

Just days earlier, file swappers were left scratching their heads after Canadian copyright regulators said that downloading copyrighted music from peer-to-peer networks is legal in Canada, though uploading files is not. The decision was prompted by questions from consumer and entertainment groups about ambiguous elements of Canadian law.

Previously, most analysts had said that uploading was illegal but that downloading for personal use might be allowed.

In the same decision, the Copyright Board of Canada imposed a government fee of as much as $25 on iPod-like MP3 players, putting the devices in the same category as audio tapes and blank CDs. The money collected from levies on "recording mediums" goes into a fund to pay musicians and songwriters for revenues lost from consumers' personal copying.

In an attempt to ride the online music wave, companies are gearing up with new players and partnerships. Digital music services provider Loudeye and Microsoft announced that they have teamed to promote Loudeye's new service that helps other companies set up online music stores much like Apple Computer's iTunes.

The companies will work together to handle the infrastructure and distribution for online music services branded by other companies that are looking to sell songs online or to enter the digital media business in some other way.

Also, Amazon.com extended a contract with Loudeye to supply music samples on its Web site. Meanwhile, retail giant Wal-Mart Stores announced that it has begun testing its own online discount music download service.

Also of note
Top programmers released a major update to Linux, version 2.6.0, a change that's expected to help carry the open-source operating system into new markets...Communications conglomerate Motorola announced that former Sun Microsystems President Ed Zander will be Motorola's next chairman and chief executive officer...Microsoft plans to reorganize its Windows unit, creating a new division more tightly focused on the development of the core operating system...Wristwatches embedded with Microsoft's smart technology are expected to appear in retail stores next month, a move that comes after a delay of several months...America Online is expected to release an upgrade for its free Winamp multimedia software next week, with a fee-based "pro" version that does MP3 encoding to follow.