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.
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.
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.
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.