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Microsoft's upcoming Windows XP operating system will cause "significant harm" to consumers, say four consumer advocacy groups.

Windows XP's tight integration with other software and restrictive licensing terms "not only mimic Microsoft's previous violations of antitrust laws, but also significantly add to them," say the groups, in a report released Wednesday. The organizations' report--"Windows XP/.Net: Microsoft's Expanding Monopoly"--was written by Mark Cooper of the Consumer Federation of America and Christopher Murray of the Consumers Union. Media Access Project and the U.S. Public Interest Research Group also signed the analysis.

The organizations also sent a letter to several federal and state officials connected with the U.S. government's antitrust case against Microsoft. They urge the prosecutors to enact suitably severe measures to curb Microsoft's behavior and to appoint a special master to aggressively enforce the chosen remedies.

"Without severe penalties for failing to comply with the consent decree, Microsoft--as evidenced by past behavior--has no incentive to obey the law. Financial penalties for noncompliance should be sufficiently large as to be meaningful to a company with billions of dollars of cash on hand garnered through abuse of monopoly power," the groups write. "Break-up should be a continual threat available to the Court should it determine that Microsoft fails to comply with the conduct remedy."

Microsoft representatives decline to comment directly on the consumer groups' report, instead referring questions to a representative of the Association for Competitive Technology, an industry-backed lobbyist group.

"Fundamentally, the message in this report is that the only way to help consumers is to take technology away from them. I think that's incredibly paternalistic and misguided," says Jonathan Zuck, president of ACT. "It's hard to get the image out of my head of Ph.D. economists patting consumers on the head as they take away their toys."

Misleading Messages?

Microsoft's Windows XP/.Net bundle contains commingled code, proprietary programming languages, restrictive licensing terms, and obstacles to thwart users from taking advantage of competitors' products, according to the report. It also charges that Microsoft uses its software and services to deliver "misleading messages," suggesting that products other than its own might not provide adequate functionality and security.

Microsoft's Passport service of linked Web sites also poses risks to consumers, the authors say, noting the depth of data it allows Microsoft to gather--data that includes credit card numbers, transaction and Internet usage data, and personal information such as nicknames, address books, calendars, and Web site bookmarks.

Microsoft's announcement last week that it will make Passport interoperable with rival authentication systems is "too little, too late," the groups say. They charge that it "looks very similar to Microsoft's long-held strategy, applied to Java and other products, of first embracing them as open, then extending them with proprietary Microsoft elements, and ultimately extinguishing them."

Microsoft may soon have to make good on its interoperability pledge. Sun and an array of industry heavyweights are developing their own single sign-on authentication system, code-named Liberty Alliance Project, to challenge Passport's dominance.

The Liberty Alliance validates the Passport model, which "gives the industry the choice and control they need," says Chris Payne, vice president of marketing for the services platform group at Microsoft. "If they're sincere, they'll probably want to work with us."

The four consumer groups aren't the only parties agitating for harsh sanctions against Microsoft in light of its upcoming Windows XP release. The state attorneys general for New York and California, who are plaintiffs in the U.S. government's ongoing antitrust suit against Microsoft, said earlier in September that they will push to ensure that remedies imposed on the company are "forward looking" with regard to Windows XP and "will change the conduct by Microsoft that the courts have found to be illegal."

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