Judge to hear Microsoft sanctions sought by states

Peter Kaplan

WASHINGTON: Nine states opposed to a proposed settlement of the antitrust

case against Microsoft Corp. go to court on Monday seeking to persuade a judge

that tougher sanctions are needed to ensure the world's largest software company

doesn't crush competition.

In hearings expected to last eight weeks, Microsoft will portray the states'

demands as excessive and try to confine remedies to specific antitrust

violations found at trial.

The hearings promise to be a pivotal battle over whether the remedies in the

case to be decided by US District Judge Colleen Kollar-Kotelly should be

narrowly focused or anticipate new areas where Microsoft can flex its monopoly

power.

In a separate proceeding, the judge still is considering whether the

settlement negotiated with the Justice Department in November, and agreed to by

nine other states, is in the public interest. In June, a federal appeals court

threw out some of the charges against Microsoft, but upheld a lower court ruling

that the company had illegally maintained its Windows software monopoly in

personal computer operating systems.

The appellate judges agreed Microsoft tried to crush rival Netscape

Communications after the company concluded Netscape's Navigator Internet browser

was a threat to Windows' dominance. When the government first brought its

landmark antitrust case against Microsoft nearly four years ago, few computer

users had ever heard of media players, instant messaging or interactive

television set-top boxes.

States want sufficient remedy



These products will now be featured in court by the states that have refused
to settle. "The states are trying to say that the market keeps moving on,

and if you don't address these new emerging technologies, the remedy is not

going to be sufficient," said Andrew Gavil, a professor of antitrust law at

Howard University.

The proposed settlement is designed to remedy the antitrust violations by

giving computer makers more freedom to feature rival software on their products,

among other things. Microsoft will parade company executives, economists and

legal experts to argue the sanctions can't go beyond those specific wrongdoings

cited by the appeals court.

"The non-settling states are not entitled to broader relief designed to

terminate what was found to be Microsoft's monopoly," the company said in

its pretrial brief.

But attorneys representing the nine dissenting states -- California,

Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West

Virginia, plus the District of Columbia -- will tell the judge that's not

enough.

The states have exhorted the judge to "go beyond the specific, past

statutory violations" found by the courts, arguing the case "has been

a futile exercise if the government proves a violation but fails to secure a

remedy adequate to address it."

The states will call witnesses from companies from related industries, from

telecommunications giant SBC Communications Inc. and hand held computer maker

Palm Inc. to interactive television software maker Liberate Technologies Inc.

To ensure a competitive market for future software, the states are proposing

that Microsoft sell a "modular" version of Windows that would allow

computer makers to strip out add-on features like the Internet browser or the

media player.

They also would force Microsoft to disclose more about its software and

license its Internet Explorer browser to other companies royalty-free.

But Kollar-Kotelly has already expressed skepticism about the breadth of the

states' argument, and has been receptive to Microsoft's contention that devices

like hand held computers and media players should be excluded.