D.O.J. Felten Notes

Edward Felten is a computer science professor at Princeton University. His areas of research include operating systems, internet software and internet security. Felten was retained by the Department of Justice to examine the structure and function of the Windows 98 operating system, Internet Explorer and the relation between the two products. According to Felten the bundling of IE and the Windows operating system is undesirable because the arrangement is inefficient. Felten defines inefficiency broadly to include factors such as user confusion and the costs of undesired computer behavior. The inclusion of IE in Windows 98 is particularly problematic because it prevents users from using Navigator in all situations. "Hardcoding" access to IE gives rise to situations where Windows launches IE despite the user's efforts to use Navigator. For example, if a Windows 98 user were to install Netscape Navigator and set it as the default browser, IE will be launched in some applications contrary to their wishes. Felten adds that these bundling arrangement cannot be justified by technological necessity.

In the absence of justification, Felten believes that the cost of inefficiencies can be minimized through user selection of browsers. Although products such as IE4 may contain features such as the embedded sub-window which are absent in other products such as Navigator, consumers will choose among competing browsers to obtain the features they seek. In Felten's opinion, the compulsory bundling of products consumers may not want with the Windows operating system is undesirable.

The feasibility of Felten's position is established by the following results:

1. Web browsing with IE 3 can be removed from Windows 95. 2. Web browsing with IE 4 can be removed from Windows 95. 3. Web browsing with IE 4 can be removed from Windows 98. 4. Web browsing with IE 4 can be replaced with Navigator for web browsing functions following the removal of IE 4.

Results 1 and 2:

According to Felten, the process of removing Internet Explorer from Windows 95 is relatively straightforward. Both versions of Internet Explorer can be removed using the "Add/Remove Programs" function. Once Internet Explorer has been removed in this manner, it is no longer possible to launch the application.

Result 3:

Although the web browsing in Windows 98 is functionally similar to web browsing with IE 4 in Windows 95, one significant difference is that users no longer have the ability to delete the web browsing function in Windows 98.

In order to demonstrate the feasibility of removing the web browsing functionality provided by IE 4 from Windows 98, Felten developed a prototype program that is activated from the "Add/Remove Programs" control panel. The program modifies two existing shared program libraries, removes a number of files and directories, and alters the Windows registry. The program removes all of the methods by which the user can browse the internet using IE - none of the files comprising IE are actually removed by the program.

The only method available to a user who seeks internet access is through the "Windows Update" selection in the Start menu. Selecting "Windows Update" takes users to a Microsoft web site. Although it is possible to access the internet in this manner the user cannot browse the internet from this site. Furthermore, this function could be deleted with minor changes to the prototype program. One reason Felten preserved this method of accessing the internet is that the "Windows Update" web site has been structured to refuse access to any non-Microsoft browsers.

Felten's demonstration proves that a process for removing web browsing from Windows 98 without endangering non-web browsing functionality is feasible. It should be noted that removal of IE using the prototype program does not prevent reinstallation of IE 4 or IE 5.

Result 4:

Following the removal of IE with the prototype program, installation of Navigator, the Windows 98 user experiences web browsing with Navigator in a "substantially similar" to the web browsing experience with IE. It is important to note that running the prototype program does not prevent later reinstallation of IE 4 or IE 5.

Felten's testimony also casts light on the appropriate method of conceptualizing products. Microsoft has attempted to define IE as consisting of four files. This definition is inadequate because of the malleability of computer code. The process of sorting code is not unlike packing groceries into bags. The inclusion of different lines of code within a file does not necessarily reflect anything about the structure or relationship between the code. Felten suggests that we conceive of a product in terms of its functionality. According to Felten, the tied product in the instant case is a web browser product that is defined by the ability it provides the user to browse the web. Conclusion

The Department of Justice has succeeded in advancing its case on a number of different fronts.

With regards to the tying theory, Felten's testimony will be important. Felten's testimony directed the government argument along the well-worn path of tying jurisprudence. By characterizing the inclusion of IE web browsing function with the Windows operating system as an unwanted forced sale, Felten defined Microsoft's business arrangements in terms of the 'forcing' doctrine that has been favored by courts.

For the purpose of determining whether separate products exist, Felten's testimony provides the Court with a reasonable method of determining whether Windows 98 is a single product. The Court should prefer a definition of separate products that emphasizes the functionalities sought by consumers, rather than groups of files containing disparate lines of code that are packaged together for a number of reasons. The emphasis on consumer demand is consistent with the demand-based test for separate products set forth in Jefferson Parish. Felten's approach also addresses the concerns set forth in J. Wald's opinion in U.S. v. Microsoft, 147 F.3d 935 (1998). Wald evinced a concern that firms would simply commingle lines of code in an attempt to integrate two separate products. By drawing attention to this possibility Felten's testimony may cast doubt on Microsoft's claim that the web browser and the operating system are integrated. Felten's evidence also ensures that Microsoft does not find a safe harbor in 'technological tying' doctrine. By demonstrating the absence of a compelling technological or economic justification for the bundling of IE and Windows operating systems Felten removed the possibility of satisfying the requirements of the Elhauge standard. The combination of web browsing with IE and the Windows operating system apparently does not offer any advantages that would be unavailable if the items were bought separately and combined by the purchaser.

Adoption of Felten's conception of a product may be critical to the government's case. If the Court were to accept Microsoft's definition of IE, the tying theory could be undermined because it may be impossible to remove the four files which comprise IE 4 in their entirety without 'breaking' Windows 98.

Finally, Felten's testimony also advances other Sherman Act '2 theories that may be presented by the government. The business practices described by Felten are akin to those of the appellant in Aspen Skiing. In Aspen Skiing a monopolist made an "important change" in the character of the market by engaging in exclusionary conduct. In the instant case, Microsoft has made a dramatic change by altering the relationship between IE and the Windows operating system. In Windows 95, users could remove the web browsing function provided by IE. In Windows 98, users do not have this option. Furthermore, competitors such as Netscape are precluded from displacing IE because of 'hardcoding.' Like the appellant in Aspen Skiing, it appears that Microsoft was not motivated by efficiency concerns, and that it was willing to sacrifice consumer good will and efficiency in exchange for a perceived impact on its rival.

Ken Murata

-- Anonymous, January 12, 1999