In a surprise joint press conference Saturday morning in Redmond, Washington, Microsoft Chairman and Chief Software Architect Bill Gates, along with the legal representatives of nine U.S. states, announced agreement upon a new set of proposed remedies, in exchange for which the states would drop all pending antitrust proceedings against Microsoft. By terms of the agreement, Microsoft would henceforth cease to charge customers for software upgrades that failed to fix existing bugs or that introduced new ones. Mark Breckler, Deputy Attorney General for the State of California, expressed it jokingly this way: "From now on, the software works or it’s FREEEEEEE!!!!"
The idea for the settlement, it was explained, had come from Gates himself, who had arrived at it while reading an old Dilbert cartoon where the punch line was, "What our customers want is software without bugs, for free." Gates explained that, after initially wondering why this was funny, he had started thinking more about it. "We can’t necessarily provide software without bugs, and if we do, it clearly can’t be provided for free; but if we don’t, surely we shouldn’t be penalizing customers for our mistakes." Gates described this way of looking at software pricing as coming to him like a bolt from the blue. "I simply had never thought of it this way before. The moment I got it, I said, ‘Gee, no wonder everyone’s mad at us!’"
Some details of the settlement remain to be arranged. In reality, Breckler said that Microsoft’s software would probably never be completely free; a more likely approach would be that, for every bug in the software, the customer would simply receive a partial refund, or a credit against the purchase of the next version. Plus, the size of this credit might be pro-rated against the customer’s needs. For example, a German customer would be credited $.01 every time a bug prevented him from typing an u-umlaut in Microsoft Word, whereas an American customer who never used German words and never encountered this bug would not get credit for it.
As Gates put it, "Customers who buy our software and encounter bugs are like pioneers; instead of penalizing them for being early adopters, we should be paying them for finding and suffering through the bugs. This plan gives us a way to do that via secure .NET services, including a new MyBugs bug reporting service." Gates expressed a hope that other software companies would follow Microsoft’s lead with this pricing model, and warned that failure to do so might cause customers to prefer Microsoft’s software to other brands. The settlement plan must now go before U.S. District Judge Colleen Kollar-Kotelly; a preliminary hearing has been scheduled for next week.
Privacy advocates and representatives of companies aligned against Microsoft immediately warned of Microsoft’s requirement that users must have a Passport account to use the MyBugs .NET service. Gates dismissed the concerns, saying that Microsoft had already announced it would lead the industry to a whole new level of trustworthiness in computing.