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Judge indicates she may broaden Microsoft case

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CIOL Bureau
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US District Judge Colleen Kollar-Kotelly has offered the federal government a

chance to say whether it thinks the nine states that oppose the settlement with

Microsoft have the right to ask for strong, nationwide penalties against the

software giant. At the same time the judge has indicated she is looking at

broadening the penalties against Microsoft to include new computer technologies

such as handheld devices.

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The judge's offer to the Justice Department would make things more difficult

for the Bush Administration, which has come under mounting fire for having

settled for what many believe to be a toothless settlement with Microsoft.

Microsoft has asked that the appeal by the nine rebel states is dismissed and

the settlement agreement ratified. 'The company claims the states have no legal

grounds for asking for tougher sanctions. "In light of Microsoft's apparent

concern for the authority of the United States it seems most prudent to ask the

United States to enlighten the court with its views on the issues,''

Kollar-Kotelly wrote in a request to the DoJ.

Meanwhile, Kollar-Kotelly gave a big boost to the states by saying she wants

to know more about handheld and other devices. "I need to learn more to

determine whether it falls beyond the outer reaches of a remedy. I've decided

that I need more factual information," Kollar-Kotelly said.

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Tom Greene, an attorney for the state of California, said he was "a

happy camper" as the judge's remarks signal she may be willing to impose

broader sanctions. "Today she has made it clear we can bring in all of our

evidence and she will at least consider its. That's just enormously important to

us."

Microsoft has argued that any the sanctions should not go beyond specific

wrongdoings dealing with past Microsoft practices. Critics, such as the nine

states say the courts need to reign in Microsoft's ability to leverage its huge

market power in newly developing markets.

In court room action, meanwhile, Microsoft lawyers started the week trying to

discredit the testimony by Gateway executive Anthony Fama who had told the judge

that Microsoft's ''market development program,'' billed as voluntary, is used to

keep computer manufacturers in line.

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Microsoft, Fama explained, uses the program to Gateway and others from

installing competing software on its computers by offering discounts worth

millions of dollars on Windows royalties. To qualify, Microsoft sets certain

system performance benchmarks, such as how long it takes the computer to

complete a full boot-up. If other operating systems are also installed, the

system would not meet the benchmark and Gateway would lose the discounts. The

benchmarks are very subjective and change from year to year. ''It is this level

of discretion that gives Microsoft the power to use market development

allowances in an arbitrary and discriminatory manner,'' Fama said.

Fama said that when Gateway complained about its contract with Microsoft,

Microsoft executive Richard Fade said the contract is nonnegotiable and he

didn't want to see his comments ''showing up at the Justice Department or in the

courts.'' Mr. Fade's comments, including that one, I perceived as a threat of

retaliation,'' Fama said.

Fama also said that Microsoft's uniform Windows license agreement, which

applies to all major computer makers, forces companies like Gateway to pay the

Windows royalty, even if the customer wants to use a different operating system.

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