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MS asked to pay $1 m. for ‘reckless’ biz practices

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CIOL Bureau
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BRIDGEPORT, Connecticut: Microsoft Corporation has been ordered to pay punitive damages of $1 million to a tiny Connecticut software company for engaging in "wanton, reckless" and deceptive business practices. US District Judge Janet Hall ordered the payment to Bristol Technology Inc. on Thursday in the biggest award ever imposed under Connecticut's fair-trade statute.



Hall's decision came less than three months after a federal judge in Washington, D.C. ordered Microsoft broken up for violating the nation's antitrust laws. That case, brought by the Justice Department and individual states, is on appeal and the Supreme Court will soon decide whether to hear it directly or send it to a lower appeals court.



Keith Blackwell, chief executive of Danbury, Connecticut-based Bristol, said on Friday, "The court's opinion is a victory for Bristol, but more importantly, for consumers." A spokesman for Microsoft said the software giant will likely appeal. Microsoft shares gained $6/16 to close at $70-3/16 in Nasdaq on volume of 18.4 million shares on Friday.



Hall said Microsoft had engaged in "wanton, reckless" and deceptive business practices. Her ruling came just over a year after a federal jury awarded privately held Bristol nominal damages of only $1 following a six-week civil trial. Bristol had alleged that Microsoft violated U.S. antitrust law by refusing to negotiate a new contract for Windows source code.



On July 16, 1999, an eight-member jury found that Microsoft had not violated antitrust law but found it liable for violating Connecticut business law and awarded the $1million. Although the Bristol case was not related to the Justice Department lawsuit against Microsoft, it made the similar claim that the software giant had used its monopoly in the market for desktop operating systems to crush competition.



"We're very happy with what she (the judge) wrote, it's a scathing report," said Jean Blackwell, Bristol's co-founder and senior vice president of sales and marketing. In adding some $999,999 to the jury's original award, the judge "has come down on Bristol's side with every fact we presented," Jean Blackwell told Reuters.



Bristol makes a product called Wind/U, which acts as a bridge between developers writing software for computers based both on Microsoft's Windows and Unix. Bristol's original contract to license Microsoft source code - the blueprint that tells computer programmers how a software programme works - expired in 1997.



Bristol claimed it was victimised by Microsoft's supposed "Trojan horse" strategy of gaining a foothold in the server and workstation markets, and then killing off competition from the Unix operating systems in those markets. Microsoft strongly disagreed, arguing that Bristol had taken a mere contract dispute and tried to dress it up with claims of antitrust violations.



Rob Enderle, an analyst with technology consultancy Giga Information Group, said the higher award was likely influenced by Microsoft's being found guilty of violating antitrust law in the Justice Department's suit against the company.



"Once again it shows that once Microsoft was found guilty in the antitrust case, it placed them in the mind of many judges as an organisation that misbehaves," Enderle said.



Judge Hall's comments could also be used by the Justice Department as further ammunition against Microsoft's appeal in the federal antitrust case, Enderle said. Microsoft has had a string of legal setbacks, and in January of this year settled an antitrust suit filed by Caldera Inc. by agreeing to pay the Utah software company $150 million. In addition, Microsoft faces lawsuits in California and Maryland that have grown out of the Justice Department antitrust case.

(C) Reuters Limited 2000.

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