Settling states unsettled by Microsoft legal move

Peter Kaplan

WASHINGTON: The Microsoft Corp. antitrust case can be a little unsettling at

times -- even if you have already settled.

Having agreed to a truce in the four-year legal battle, nine of the states in

the case now find themselves having to voice objections to Microsoft's latest

legal maneuver, which discounts state authority in antitrust matters.

Microsoft on Wednesday asked US District Judge Colleen Kollar-Kotelly to

dismiss the proposals of nine other states seeking stiffer sanctions against the

company, arguing they have no right to interfere with the US Justice

Department's decision to forge a nationwide settlement.

But the states that have settled with Microsoft -- including New York,

Illinois and Michigan -- expressed concern with that argument in a footnote to a

filing backing the settlement. "To assure no misapprehension, the settling

states wish to state that they regard Microsoft's dismissal motion as without

merit," the states said in their brief.

Antitrust attorneys said on Friday they are not surprised by the footnote.

"The settling states want to settle because they want to look good, but

they sure don't want a precedent like what Microsoft is seeking here," said

antitrust attorney Steve Axinn.

Steve Houck, an attorney who worked on the case under New York's attorney

general and is now in private practice representing the dissenting states,

agreed. "I think they really have to take that position for the sake of

their future enforcement activities," he said.

Legal analysts believe the Microsoft argument is a long shot, but it is

potentially dangerous for all state attorneys general. If Microsoft's argument

were upheld, it would reverse a legal precedent dating back to the 1980s that

gives state attorneys general the authority to pursue antitrust cases apart from

the federal government.

Kollar-Kotelly will hold a hearing starting March 6 on whether the proposed

settlement is in the public interest. Separate hearings on the demands for

tougher sanctions will begin March 11 and will likely run for 6 to 8 weeks.