Microsoft judge sets March hearing on settlement

Peter Kaplan

WASHINGTON: The judge overseeing the Microsoft Corp. antitrust case opened

the door on Friday to considering arguments for tougher sanctions against the

software giant before ruling on a proposed settlement.

US District Judge Colleen Kollar-Kotelly said she would hold a hearing the

week of March 4 on the settlement reached between Microsoft and the US Justice

Department, but gave no indication she would reach a quick decision on whether

to endorse the deal.

She quizzed lawyers from the company and the government in court on Friday on

whether they would present issues at the hearing common to both the settlement

and to tougher sanctions sought by a group of states who have rejected the deal.

Hearings on the tougher sanctions are not scheduled to begin until March 11.

Legal analysts said her remarks indicated the dissenting states may get a chance

to start making their case for more drastic sanctions against the company before

the judge decides on whether to endorse the settlement.

"I think that really means she's not going to decide the (settlement)

before March 11," said Robert Lande, a law professor at the University of

Baltimore who attended Friday's hearing.

The dissenting states would find it more difficult to ask for tougher

sanctions if Kollar-Kotelly endorsed the settlement before hearing their

arguments for stronger remedies.

Under a federal law called the Tunney Act, Kollar-Kotelly must determine

whether the proposed antitrust settlement is in the public interest after

reviewing public comments on the deal. "She's taking these public comments

so seriously," Lande said. "If you take the public comments real, real

seriously, you don't dispose of them in a week."

The Justice Department and nine states in the case have signed on to a

settlement that would, among other things, give computer makers more freedom to

feature rival software.

But nine other states refused the settlement and are pressing the judge to

impose stronger remedies against Microsoft for illegally maintaining its

monopoly in personal computer operating systems.

Lawyers for Microsoft and the Justice Department had told the judge on

Thursday that she should hold a one-day hearing on the proposed settlement as

soon as possible and bar critics of the deal from participating at the hearing.

While agreeing to hold hearings, Kollar-Kotelly on Friday made no decision

about how long the hearings would be or whether critics of the settlement will

be allowed to participate. "I see the structure of the hearing as sort of

an evolving process," Kollar-Kotelly said. "I'll be making decisions

as I'm provided information."

At Friday's hearing, Kollar-Kotelly also told the Justice Department to

respond -- in legal briefs to be filed before the settlement hearing -- to

critics who have questioned whether the settlement is in line with the appeals

court ruling against Microsoft, and whether the department did not fully explain

the alternatives it considered before settling.

By the same token, the judge asked attorneys for Microsoft to respond to

critics who contend the company did not disclose all its contacts with

government officials during the settlement talks, as is required under the

Tunney Act.

That criticism is spelled out in a lawsuit filed in January by the non-profit

American Antitrust Institute. The AAI has asked Kollar-Kotelly not to make a

ruling on the settlement until its charges are resolved. Later on Friday, the

Justice Department filed a motion in court urging Kollar-Kotelly to throw out

the AAI's lawsuit.

The department said the lawsuit should be dismissed because the government

has made all the disclosures it's required to make, and because private groups

like the institute have no standing to sue under the Tunney Act.

In its brief, the department also said the Tunney Act "does not require

any explanation of how alternative remedies would have affected competition in

the marketplace." Meanwhile, in another legal brief filed on Friday,

attorneys for Microsoft said an executive at Oracle Corp. had helped write the

tougher antitrust sanctions being sought by the dissenting states attorneys

general.

In that brief, Microsoft said it had documents that show Oracle Vice

President Ken Glueck was one of the "prime movers" behind the remedies

being sought by the dissenting states.

Oracle, the world's No. 2 software provider, did not comment directly on

Microsoft's allegation. The company said in a statement that it had not yet seen

the legal brief, but said it was probably a "delaying tactic."

(C) Reuters Limited.