Microsoft, US hope to woo judge with settlement

Peter Kaplan

WASHINGTON: Microsoft Corp. and the US government pitch their antitrust

settlement to a federal judge on Wednesday, hoping to get her endorsement

despite objections from nine states seeking harsher sanctions against the

company.

Lawyers for the software giant and the US Justice Department will try to

convince US District Judge Colleen Kollar-Kotelly the settlement is in the

public interest, even as lawyers prepare for separate proceedings on the

possibility of tougher remedies.

Both sides will be watching the judge for any sign she may be prepared to

endorse the settlement before the March 11 start of remedy hearings. Andrew

Gavil, a law professor at Howard University in Washington, predicts that

Kollar-Kotelly will be very cautious in her comments from the bench.

But Gavil said the judge's questions may provide some hints about her views

on the settlement. "Look for questions that suggest there are particular

provisions that she's uncomfortable with," Gavil said.

The software giant reached the settlement deal with the US Justice Department

in November after an appeals court in June upheld a lower court's conclusion

that Microsoft had used illegal tactics to maintain its Windows

personal-computer operating system monopoly.

Nine of the 18 states in the lawsuit agreed to sign on to the settlement. But

another nine -- California, Connecticut, Florida, Iowa, Kansas, Massachusetts,

Minnesota, Utah and West Virginia -- still are pursuing the case, saying the

settlement is too weak.

Kollar-Kotelly's endorsement of the settlement is required under a federal

law called the Tunney Act that governs federal antitrust settlements. Judges

typically give deference to the Justice Department, and their approval almost

always is granted.

An unprecedented situation



But the Microsoft settlement confronts Kollar-Kotelly with an unprecedented
situation that will complicate her decision, according to legal experts.

That's because the courts already have ruled against Microsoft and concluded

that the company illegally maintained its dominance in personal computer

operating systems. All previous settlements under the Tunney Act, in contrast,

have involved cases that never got to trial or a verdict.

"Now that there's a liability ruling, it seems to me Justice has its

feet to the fire," said Robert Litan, vice president and director of

economic studies at the Brookings Institution think tank.

Under the Justice Department's proposed settlement with Microsoft, computer

makers would get more freedom to feature rival software on the machines they

sell. It also would require Microsoft to share some of the inner workings of its

Windows operating system with rival software makers.

Because of the past rulings against Microsoft, Kollar-Kotelly could have more

leeway to modify or reject the settlement if she concludes that it does not

respond to Microsoft's antitrust violations, Litan said.

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. On the other hand, the states would get a big

break if they are allowed to start making their case for more severe sanctions

before the judge decides on whether to endorse the settlement.

Litan said Kollar-Kotelly may give the settlement an "interim"

endorsement, while still withholding judgment about whether more sanctions

should be imposed on Microsoft. "I don't think she will reject the

settlement," Litan said. "I would say that she's likely to issue some

kind of a ruling and say, 'This has no bearing on what I'm going to do in the

remedy phase.'"