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Remembering How Microsoft's Fake Windows Error Ended In a $280 Million Secret Settlement (makeuseof.com) 70

Slashdot reader joshuark summarizes this walk down memory lane from the tech site MakeUseOf: Facing real competition from Digital Research's DR DOS, Microsoft secretly embedded a sabotaging mechanism known as "AARD code" into beta versions of Windows 3.1 to prevent it from running on Digital Research's competing DR DOS operating system.
This code triggered fake, alarming error messages to convince developers that DR DOS was unstable... Although Microsoft disabled the feature in the final retail release, the California-based firm Caldera, Inc., which had acquired DR DOS assets, sued Microsoft for anti-competitive practices.
Microsoft settled the lawsuit out of court in 2000 for $280 million, a figure that remained sealed until it was unsealed in 2009.

Remembering How Microsoft's Fake Windows Error Ended In a $280 Million Secret Settlement

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  • Oh, right! (Score:5, Insightful)

    by T34L ( 10503334 ) on Tuesday June 30, 2026 @06:38AM (#66216490)

    The current miasma of enshittification and anticonsumerism among all the major software companies makes me occasionally forget that Microsoft has been ahead of the curve by decades and incredibly evil and garbage pretty much from the beginning.

    • Re:Oh, right! (Score:5, Insightful)

      by KiloByte ( 825081 ) on Tuesday June 30, 2026 @08:17AM (#66216560)

      Still, they're the Monsanto of software: if something would be worth doing and lucrative, but is not evil, they're not doing.

      This scorpion doesn't seem able to change its stripes.

      • Re:Oh, right! (Score:5, Interesting)

        by AleRunner ( 4556245 ) on Tuesday June 30, 2026 @09:24AM (#66216654)

        The irony here is that the true evil has been missed from the story. Microsoft was deliberately trying to fund Caldera to damage Linux. This settlement was an effective way to transfer money from one company to another, avoiding taxes, avoiding scrutiny and settling an outstanding potential future Microsoft liability.

        • by sphealey ( 2855 )

          I am old and my sight grows dim, but I am pretty sure this all happened before the first 0.01 version of Linux was released.

          • Well, right there with you rocking age and macular degeneration. You're right. It was only a year before, though, in 1991. The first version of Linux IIRC was in 1992. I remember getting it either in late 92' or early 93' as "SLS Linux" on @30 1.44 MB 3.5" floppy disks.

            What kills me is that there is no corporate jail or death penalty for stuff like this. I'm also a little salty about how sanguine everyone has always been about stuff like Windows Server or M$ Exchange. I'm always flabbergasted when someone
          • Re:Oh, right! (Score:4, Informative)

            by HighOrbit ( 631451 ) on Tuesday June 30, 2026 @04:18PM (#66217302)
            The 2000 settlement with Microsoft was right in time for Caldera to take the $280 million, buy SCO (Santa Cruz Operation) assets, rename itself "The SCO Group", which it then leveraged in the infamous 2003 SCO vs IBM lawsuit claiming Linux infringed the SCO-licensed (but Novell owned since 1993) AT&T copyrights. Caldera's (aka The SCO Group's) lawsuit collasped when it was revealed that SCO did not own the AT&T Unix copyrights, but that AT&T had sold them to Novell and Novell had merely licensed them to SCO.
            • The 2000 settlement with Microsoft was right in time for Caldera to take the $280 million, buy SCO (Santa Cruz Operation) assets, rename itself "The SCO Group", which it then leveraged in the infamous 2003 SCO vs IBM lawsuit claiming Linux infringed the SCO-licensed (but Novell owned since 1993) AT&T copyrights. Caldera's (aka The SCO Group's) lawsuit collasped when it was revealed that SCO did not own the AT&T Unix copyrights, but that AT&T had sold them to Novell and Novell had merely licensed them to SCO.

              Yep.

              Even without the ownership issue it would almost certainly have failed because TSG (to distinguish them from SCO) discovered to their shock and amazement that Linux had not, in fact, kifed code from Unix. They clearly went into it assuming that a bunch of volunteer hackers couldn't possibly have built a fully-functional kernel, expecting they could easily prove lots of copyright infringement. Failing to find infringement they hoped they could bluster IBM into settling, but IBM was determined to figh

      • by swinefc ( 91418 ) *

        This scorpion doesn't seem able to change its stripes.

        That is why you never let a scorpion ride on your back as you cross a river.

        10 points for getting the reference

    • Lotus (Score:3, Funny)

      by flyingfsck ( 986395 )
      Windows isn't done until Lotus doesn't run.
    • As opposed to IBM, a company whose IBM System/360 OS was totally open-source and didn't create a huge API moat that continues to this day. Same for VMS, a rather expansive API moat that was the sole reason anyone was buying VAXens after RISC workstations became commonplace and is the reason some corporations are still buying VAX clones or VAX virtualizations solutions. Or even the various RISC workstations, whose Unix-based OSes were proprietary and just different enough among each other for every OS to hav
      • Re:Oh, right! (Score:5, Informative)

        by dryeo ( 100693 ) on Tuesday June 30, 2026 @12:37PM (#66216864)

        While your point is valid, there were differences in some things such as how IBM handled their anti-trust case compared to MS. IBM had a consent agreement with the DOJ and mostly followed it with one result the rise of MS, which at least partially due to IBM's consent agreement got a very good deal on DOS, along with a more open philosophy from IBM. Compare to MS who immediately tried to work around their anti-trust agreement and got political resulting in Bush basically cancelling their anti-trust case.
        A good example was the competing operating systems on the PC in the mid 90's.
        You had OS/2 (v2+) which during install, if another OS was on the system, installed a Boot manager, called BootManager, which upon boot allowed you to multi-boot, DOS, Windows, OS/2, Linux etc. Meanwhile with MS, it monopolized your HD. Install Win9x on your multi-booting HD and at the end of the install, it would inform you that it had wiped your OS/2 install. No warning, no mention of how a minute or 2 with fdisk could return your multi-boot environment. Imagine, you test a new OS and after installing it, you are informed all your stuff is permanently gone, even though it actually was still there.
        Another thing with installing Win9x was that if you had OS/2 installed, it didn't worry about if you had a serial number to enter during install. This continued their attitude that a pirated version of Windows was better then a paid for competitors OS.
        OS/2 also mostly followed standards rather then creating their own like MS.

      • We were still buying VAXes because we would put the VMS tapes aside, install a second CPU (the "PurDual" modification), install BSD (Berkeley Unix), and run them nearly 24x7 for years at a time. "We" included the (large) university I was at, but it also includes a LOT of other universities, because -- thanks to DEC's academic discounts on hardware -- this was one of the most cost-effective ways of deploying a lot of computing power. (For the time, of course,)
        • There are more VAX machines around than you probably expect. We sell VAX and Alpha emulators and support a lot of customers on those or real hardware. We have *many* folks on [Open]VMS 7.x and even more on 8.x. Even a handful that still run Tru64 UNIX (4.0G also called "Digital Unix" and 5.1B).

          There's SIMH if you want something for free, there's AVTware's vtVAX (and vtAlpha), there's MSI's FreeAXP and Avanti alpha emulators, there's also Charon-AXP emulator from horrible horrible Stromasys. I also think Q
  • How does that make sense? They almost did something illegally anti-competitive but then didn't. What's the settlement for? If you spend 3 months planning a bank robbery and then call it off, you didn't commit a crime. Likewise, they didn't ship the offending code.
    • From TFS:

      "This code triggered fake, alarming error messages to convince developers that DR DOS was unstable..."

      Presumably this spooked developers who were looking at the code before it officially shipped. Once a developer is spooked, can he really be unspooked?

      • by dryeo ( 100693 )

        Not just developers, users who were beta testing. Beta programs were pretty open.

    • by douglasfir77 ( 6439950 ) on Tuesday June 30, 2026 @08:49AM (#66216600)

      In U.S. law, you can be charged with criminal conspiracy even if the planned crime never actually happens. Conspiracy is considered an “inchoate” offense, meaning it is a crime before the target crime is completed.

      But in this case they did commit the crime.

    • by DarkOx ( 621550 ) on Tuesday June 30, 2026 @09:03AM (#66216624) Journal

      They did it in the pre-release software knowing that the issues would get picked up by the tech press. Remember this was Windows 3.1 era. Most Windows/Dos users were not internet users.

      People relied on what they read in things like PC Mag and Byte, yes even corporate IT decision makers. Microsoft knew that those sorts of publications would leap on the opportunity to test pre-release Windows, would actually try it out on a variety of PC hardware and DOS versions. These were monthly publications at most and would be unlikely to give space to a second review until after the RTM version hit store shelves.

      The message would be clear, for a smooth experience on the new Windows, you better plan an upgrade to MSDOS 5. I know a lot of people jumped from MSDOS 3.x to 5.0 at the same time they bought Windows 3.1[1]. So it worked..

      By the time everyone figured out Windows 3.1[1] was just fine on DR DOS, they'd already switched MSDOS or already paid to upgrade to MSDOS 5, so Digital Research was not getting the users back.

    • by tlhIngan ( 30335 )

      How does that make sense? They almost did something illegally anti-competitive but then didn't. What's the settlement for? If you spend 3 months planning a bank robbery and then call it off, you didn't commit a crime. Likewise, they didn't ship the offending code.

      Actually, if you planned the bank robbery with anyone else, you can still be charged in a criminal conspiracy, even if the bank robbery never happened.

      And the code DID ship. It didn't ship in the final retail build that customers bought, but many c

      • Oh yeah, I remember. My PC experience started with DOS 3 on an XT. Maybe 3.1, it was a long time ago.

        DarkOx provided the better answer though. If this were a contest, you'd get 2nd place. Beta went to magazines, magazines reported on the errors, the harm was done.

        Though I do also remember DR-DOS being horrible anyhow. Lots of incompatible games, which was all I cared about. Couldn't tell you which, but when Jake's dad put it on their computer, lots of stuff stopped working.

      • by dryeo ( 100693 )

        I think it was mostly WFWG, Win3.11 where it became more of an operating system. Win 3.1 ran fine in enhanced mode on OS/2 instead of DOS. There was one or 2 binaries replaced when you installed OS/2 redbox to replace/complement DOS, mostly graphics related so that Win3.x Windows could be displayed on the OS/2 desktop. DOS and OS/2 could co-exist on the drive and that Windows install would run on either DOS or OS/2, standard or enhanced mode.
        Ran better too, especially if you used the HPFS file system which

  • by rsilvergun ( 571051 ) on Tuesday June 30, 2026 @08:30AM (#66216568)
    I know that sounds like a non sequitured but stick with me.

    In the old days antitrust lawsuits were part of the enforcement mechanism. If you illegally used a monopoly to harm competition you could expect your competitors to sue you and win.

    After the lawsuit you would have to adjust or change your behavior or the regulator would move in.

    Microsoft was when that broke down. They did the payouts but the regulator never moved in. Well it did, but then Bush Jr won the election and that was that.

    So what does that have to do with beef prices? McDonald's has colluded with the beef producers. The beef producer is now giving McDonald's a kickback to keep their profits up while keeping the price of beef elevated via collusion. The regulator is asleep at the wheel or more likely they got shived by the administration. Meanwhile you're paying $8 a pound for ground beef.

    You can't keep allowing all the systems that protect you and keep prices low to collapse and then complain when prices shoot up and crooks you all your property. You need to start making a choice between candidates that will actually put money in your pocket and keep it there and candidates that give you that warm feeling inside from grievances.

    Unfortunately so far Americans are on track to go for grievance politics
    • 85% of the meat packing industry in the US is owned by four multinational megacorps:

      Tyson Foods (U.S.-owned)
      Cargill (U.S.-owned)
      JBS (Brazilian-owned)
      National Beef (Brazilian-owned)

      They are very obviously operating as a cartel. They have faced legal action to this effect, though nothing with real teeth.

      I don't really see why McDonald's is relevant since they don't produce the beef, they are a buyer of it. Be that as it may, cartel behavior is harmful to the economy and is an inevitable result whenever the

      • It doesn't help we're Making Parasites Great Again https://farmpolicynews.illinoi... [illinois.edu]

        • by tlhIngan ( 30335 )

          It doesn't help we're Making Parasites Great Again https://farmpolicynews.illinoi... [farmpolicy...illinoi...]

          One needs to remember that USAID was actually the agency keeping screwworm at bay. It was listed as agricultural aid - and that aid was in keeping the parasites from spreading. Sure, it helps the other countries, but it also means the parasite doesn't hit US soil.

          This is likely to cost US beef ranchers way more than what USAID cost to run, and even if you funded USAID now, it will take years to eradicate.

      • Is that large companies weren't too large so they were keeping each other in check.

        As a voter Americans were disorganized and distracted to focus on antitrust law enforcement under normal circumstances.

        So what would happen is McDonald's would be getting overcharged by the beef producers and they would file a lawsuit and get the public's attention to break up the cartel. This would benefit the public in the form of lower beef prices across the board.

        These companies have gotten so large they don't
      • by dryeo ( 100693 )

        It doesn't even have to be collusion when there are only 3 or 4 big players. One raises its prices, the others see it and think, good idea, and raise their prices.

    • Do you not see how you're just expressing a grievance regarding anti-trust enforcement? How are you any different? You're just saying that you want people to vote for candidates that share your grievances.

      And also, you're wrong. The process you say didn't happen, quite clearly did. The regulators absolutely moved in, that's why IE and Teams got unbundled.

      Bush had nothing to do with it. The first verdict happened before the election, and then it went to an appellate court that reversed parts of th

      • It's 2026.
        Everything is partisan, don't you understand? That's *part* of the enshittification. :|
        But thank you for trying to bring actual facts to the discussion.

        I've been convinced for decades that nobody in the beltway - whether they have a (R) or (D) by their name, or a 'nonpartisan bureaucrat' (ha ahahahaah) - gives much of a shit about the 340m people outside the beltway except as farmable resources.

        • You're absolutely right that there is an insular mindset that emerged within the DC Beltway. And everyone else knows it - hence "not an insider" being an issue in elections. People have looked for ways around it - term limits, more time in the district, allowing more telepresence, etc. - but it's a tradeoff. It's harder to get things done in DC if you don't have that network of beltway relationships, and basic group dynamics says the insiders will close ranks against outsiders despite party affiliation.
      • Grievances? What the fuck are you talking about you imbecile?

        Monopolies have a enormous and well-documented negative impact on consumers. How the fuck would any sane human being who knew what the word means be opposed to antitrust law enforcement?

        I'm guessing that you're a bot. Because nobody in their right mind would write something that fucking stupid by themselves. I'm guessing the prompt was write a reply to this comment regarding antitrust law and mentioned grievances.

        I think that's kind of
        • You repeatedly expressing a grievance over anti-trust enforcement. I don't know why you couldn't figure that out. Also, I don't know why you assume I am then against it. I'm not, I'm against silly complaints made by people who couldn't be bothered to look into the claims they made.

          You said Bush quashed the Microsoft case. He had nothing to do with it. The Appeals court, headed by a Clinton appointee, tossed the decision you wanted which was made by a Reagan appointee, and sent it to another Clinton

    • You need to start making a choice between candidates that will actually put money in your pocket and keep it there and candidates that give you that warm feeling inside from grievances.

      Ok, I am willing to play this game: How exactly do I determine which candidate will actually put money in my pocket? Every single one promises they will do that, but absolutely none have in the past 50 years that I have been observing. Some are worse than others, but ALL of them appear to be bad. I wonder if that has to do with political parties and "first past the post" type of elections that we have... but if that were the case, then it wouldn't REALLY matter how I vote as the general outcome is already d

  • by Thud457 ( 234763 ) on Tuesday June 30, 2026 @08:38AM (#66216586) Homepage Journal
    Wow, Caldera, there's a company I haven't heard about in a looooonnngg time.

    Let's remember that they transformed into blatant patent troll and persistent lawsuit pest The SCO Group [wikipedia.org] which Microsoft funded in a futile attempt to bludgeon Linux out of existence.
    • by rsilvergun ( 571051 ) on Tuesday June 30, 2026 @10:08AM (#66216714)
      Honestly without our government being captured by billionaires and foolish voters falling for slick media campaigns none of what these Jokers do would matter.

      One individual asshole isn't enough to screw us all over. It takes a lot of money and a lot of people who aren't paying attention to what's going on for . And that's on all sides. I'm on the left wing and we are dumb as dishwater. We are currently in fighting with the centrists instead of doing something about the little fascists.
    • by abulafia ( 7826 )
      Now there's a blast from the past.

      Those shitweasels caused a lot of pain and cost a lot of money. Darl's reward was picking scraps from the SCO trash heap, bankruptcy and then croaking of ALS.

      I wonder what PJ is up to.

      • by TWX ( 665546 )

        I don't wonder what PJ is up to. I can't even remember the site name/URL that originally was covering that and had forums, but when the password restrictions because utterly freakin' stupid for a new aggregator and discussion forum I just stopped bothering to visit.

  • by Mirnotoriety ( 10462951 ) on Tuesday June 30, 2026 @08:48AM (#66216598)
    Microsoft under Bill Gates, an extortion & protection racket ?

    Groklaw: Microsoft Litigation Resource Page [archive.org]
  • If you have to go back 26 years to find something to complain about, you really don't have a basis to complain.
  • Unfortunately they were able to drag it out until Digital Research was pretty much dead.
  • I've noted the comments here about how this is old news: that's true. But it will be novel to some people who didn't live through it, and even for those who did, it's a necessary reminder. Microsoft is ruthless, unscrupulous, and unethical: they will do anything. They're not the only ones, of course, but they're arguably the most dangerous because of their size, wealth, and longevity. They're the enemy of open standards. They're the enemy of open source. They're the enemy of open protocols. They're
    • Now imagine saying this about, say, Japan.

      I've noted the comments here about how this is old news: that's true. But it will be novel to some people who didn't live through it, and even for those who did, it's a necessary reminder. Japan is ruthless, unscrupulous, and unethical: they will do anything. They're not the only ones, of course, but they're arguably the most dangerous because of their size, wealth, and longevity. They're the enemy of open standards. They're the enemy of open source. They're the ene

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