Half the states oppose Microsoft settlement

The antitrust case against Microsoft took another dramatic turn on Wednesday.

After another night of negotiations, Microsoft made several more concessions in

order to win the support of the states who joined the US Justice Department in

the antitrust case against the company. But nine other states said they cannot

support what they see as a weak settlement. They have asked the presiding

Federal District Court Judge to schedule hearing on the settlement in order to

have the court toughen the terms of the settlement.

With their decision to oppose even the modified settlement, the pact between

the government and the states has fallen apart and the nine rebel states now

face both Microsoft and the US Justice Department in trying to get tougher

punishment for Microsoft's misuse of its monopoly power. So far, only

California, Massachusetts and Minnesota told the judge they are prepared to

continue with the antitrust litigation against the software giant. Six other

states said they needed more time to study the settlement.

Because of the opposition to the deal, it will be up to Judge Colleen

Kollar-Kotelly to decide whether to accept the terms of the deal or to open

hearings on the settlement where competitors of Microsoft will be able to voice

their concerns. She said she would make an announcement soon on scheduling

hearings on the settlement.

Legal experts say Kollar-Kotelly will have little choice but to hold hearings

on the matter in the face of the opposition. Whether the states and other

opponents can persuade her to reject the deal remains to be seen. But that would

not be the first time. After the government and Microsoft announced a settlement

in the 1994 antitrust lawsuit, a single Silicon Valley antitrust lawyer, acting

on behalf of several Microsoft competitors, caused the settlement to be thrown

out. The US Justice Department subsequently fired the judge from the case and

appointed one that accepted the deal, which proved too weak to prevent Microsoft

from exploiting its monopoly power.

For its part, Microsoft said it is unwilling to engage in any further

negotiations to get the rest of the states to support the deal. "Microsoft

believes the settlement process has come to an end,'' company attorney John

Warden told the judge. "The issues in this case have been beaten to death,

and they have been beaten to death by people who are worn out.''

In the last-minute concessions Microsoft agreed to broaden the disclosures of

technical data it must make to competing companies with regards to the operation

of its powerful server software. In addition, Microsoft agreed to add the phrase

"or the Internet'' to one section of the agreement where is required to

reveal technical details about servers other than just those used for office

networks. That slight change could have broad implications for Microsoft .NET

strategy.

Microsoft also agreed to a third oversight committee run by the states to the

states can ensure compliance with the settlement.