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Follow UsTim Dobbyn
WASHINGTON: Massachusetts appealed the settlement in the Microsoft Corp. antitrust case, splitting from a group of nine states that had been seeking tougher sanctions against the software giant. Seven of those nine states will now help enforce the court-ordered remedies, but Massachusetts continues to believe the settlement is insufficient to deter Microsoft's abuse of its monopoly in personal computer operating systems.
"We are prepared to go our own way," Massachusetts Attorney General Tom Reilly told a news gathering. "There was nothing in the deal that would change Microsoft's business practices in any substantial way." California, Connecticut and Iowa said they -- as well as Florida, Kansas, Minnesota and Utah plus the District of Columbia -- would not appeal the settlement.
Instead, these seven states and the District of Columbia will focus on ensuring that Microsoft complies with the 1 Nov ruling by U.S. District Judge Colleen Kollar-Kotelly. West Virginia is the remaining state in the group of nine that thought the pact negotiated by the U.S. Justice Department was too weak. It expects to announce its decision on Monday.
Connecticut Attorney General Richard Blumenthal said Microsoft had agreed to pay $28.6 million to the states -- about $25 million to cover legal costs and fees plus $3.6 million for future enforcement and compliance. "Consumer interests are now best served by turning our focus to enforcement," Blumenthal said in a statement.
California Attorney General Bill Lockyer also emphasized enforcing Kollar-Kotelly's decision. "While not completely satisfying, the court decree closed enforcement loopholes, keeps compliance with the remedies squarely before the court and allows us now to turn attention to making sure that Microsoft competes fairly in the marketplace," he said.
Reilly sees much at stake
Massachusetts' appeal to the U.S. Court of Appeals for the District of Columbia will drag out the already 4-1/2-year-old case. But Reilly said there were important principles at stake. "The settlement deal ignored Microsoft's ill-gotten gains, did nothing about safeguarding competition in new technologies, and was filled with loopholes and exceptions," he said. "We believe that a remedy must send a message that breaking the law does not pay."
But some legal scholars say Massachusetts faces an uphill fight in trying to convince the appellate judges that Kollar-Kotelly erred in her decision. "If I were making the call for Massachusetts, I would say: 'We've fought the good fight, now let's move on to other problems'," said Southwestern University law professor Lawrence Sullivan, who advised the federal government in bringing the suit against Microsoft.
Microsoft spokesman Jim Desler said the company remained focused on complying fully with Kollar-Kotelly's judgment. The appeals court ruled in June 2001 that Microsoft had illegally maintained its Windows operating system monopoly, but rejected a trial court proposal to break the company in two.
The case was then transferred to Kollar-Kotelly to determine the appropriate remedies in the case. She heard 32 days of testimony to determine what sanctions should be imposed on Microsoft. During the remedy hearings, the attorneys for the states argued unsuccessfully that the antitrust sanctions should be designed to stop the company from using Windows to crush competition in the markets for emerging technologies such as server software and handheld computers.
But in her 1 Nov ruling, Kollar-Kotelly rejected nearly all the demands for stronger sanctions. The settlement gives computer makers greater freedom to feature rival software on their machines by allowing them to hide some Microsoft icons on the Windows desktop.
Under the settlement, Microsoft is prohibited from retaliating -- or threatening to retaliate -- against computer makers who choose to feature non-Microsoft products. Nor can it enter into agreements that require the exclusive support of some Microsoft software.
The company still faces a series of class-action lawsuits brought on behalf of U.S. consumers, along with civil suits brought by Sun Microsystems Inc. and other competitors who claim they were victimized by the company's anti-competitive tactics. The world's largest software company is also awaiting the findings of an antitrust probe by the European Commission.
© Reuters