Final arguments due in Microsoft antitrust case

WASHINGTON: Attorneys for Microsoft Corp. and nine states will make their
final arguments in court on Wednesday over what antitrust sanctions should be
imposed on the software giant.

In a last appearance before US District Judge Colleen Kollar-Kotelly,
Microsoft will make its case for the judge to approve the settlement reached
with the Justice Department in November and to reject more severe sanctions
proposed by the nine dissenting states.

Each side will get three hours to sum up its case and convince the judge
their antitrust remedy is best for consumers.

One lawyer close to the four-year-old case expects the judge will question
each side closely to determine just how far the remedy needs to go to address
the illegal conduct and no farther. "She needs to know where to draw the
line," said this attorney.

Last June, a federal appeals court upheld trial court findings that Microsoft
illegally maintained its Windows monopoly in personal computer operating
systems. The appellate judges rejected breaking the company in two to prevent
future antitrust violations but sent the case to a new judge, Kollar-Kotelly, to
consider the best remedy.

In their final arguments, Microsoft and the non-settling states will attempt
to tie together 32 days of testimony between March and May -- including an
appearance by Microsoft Chairman Bill Gates -- on how to best prevent any
further antitrust violations.

Attorneys for the states are expected to tell Kollar-Kotelly that the stiff
sanctions they've proposed are needed to restore competition to the computer
industry. Microsoft will likely counter that the states' proposed sanctions,
including a version of Windows with removable features, are too severe and would
end up hurting consumers.

Attorneys for the company have argued that the restrictions being sought by
the states would benefit rivals like AOL Time Warner Inc. and Sun Microsystems
Inc., and would deprive consumers of a reliable platform for software.

Microsoft has said the states' plan would be impossible to comply with, would
end up hurting computer security and "dramatically impairing Microsoft's
ability to develop new versions of Windows." Lawyers for the company
contend the states' case is rife with legal flaws, in part because their
proposed sanctions go far beyond anything the company has done wrong.

The states, in turn, have accused Microsoft of distorting their proposal.
They say the company's proposed settlement with the Justice Department is too
weak to be effective. Under the Justice Department settlement, Microsoft would
be required to let computer makers hide desktop icons for some features of its
Windows operating system to allow the promotion of competing software.

The hold-out states, including California, Massachusetts, Iowa and
Connecticut, say stricter sanctions are needed to protect new technologies such
as Internet services and handheld computers from any anti-competitive tactics.

Attorneys for the states have accused Microsoft of trying to frighten the
judge away from imposing stronger measures against the company. They describe
the company's case as a "monopoly-is-good-for-you argument."

(C) Reuters Limited.