Microsoft anti-trust ruling to be pronounced today

CIOL Bureau
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Peter Kaplan

WASHINGTON: Microsoft Corp. learns on Friday whether a federal judge will approve the proposed settlement of its landmark antitrust case, reached last year with the U.S. Justice Department and nine states.

U.S. District Judge Colleen Kollar-Kotelly will hand down her ruling at 4:30 p.m., according to a notice posted on the court's Web site Thursday. Nine other states have challenged the settlement as too weak to prevent Microsoft from illegally maintaining its monopoly in personal computer operating systems and using that dominance to gain advantage in other areas of computing.

The law requires Kollar-Kotelly to decide whether the settlement is in the public interest and what additional sanctions -- if any -- to impose on Microsoft beyond the settlement terms.

Whichever way it goes, Friday's decision could be the end of the line in the case filed back in 1998 under the Clinton administration. "If she approves the settlement, that's it," said antitrust attorney Steve Axinn. On the other hand, any modifications the judge makes to the settlement were unlikely to be overturned on appeal, he said. "She has broad discretion here."

The original suit included charges that Microsoft had used its Windows program to promote its Internet Explorer software over a rival browser made by Netscape, now part of the AOL Time Warner Inc. online and media empire. An appeals court in June of 2001 upheld trial court findings that Microsoft had illegally maintained its Windows operating system monopoly, but rejected breaking the company in two. The case was then transferred to Kollar-Kotelly to determine the appropriate remedies in the case.

Microsoft reached the settlement with the Justice Department and nine states in November after Kollar-Kotelly urged the parties to reach an agreement. 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.

No retaliation

Microsoft would be prohibited from retaliating under the settlement against those who choose non-Microsoft products, nor could it enter into agreements that require the exclusive support of some Microsoft software.

Windows would be sold under a standard license to the major computer makers, under the proposed settlement, although discounts would still be allowed according to the volume of the order.

The nine states who declined to settle are California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West Virginia, plus the District of Columbia.

These non-settling states have asked for greater disclosure of Microsoft's code to allow rival software to work better with Windows. They have also sought a version of Windows with removable add-on features to create a better niche for competing versions of things like Internet browsers and media players.

The proposed settlement would be overseen by a three-person technical committee reporting to the Justice Department. It would expire after five years with the possibility of a two-year extension. The states had wanted their sanctions to last 10 years, overseen by a special master who would report directly to the court.

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

© Reuters Ltd.