States Likely to Join Forces to Sue Microsoft

From Associated Press

About a dozen states are likely to file an antitrust lawsuit against Microsoft Corp. separate from one being considered by the Justice Department, a state official said Friday.

While cautioning that no final decision had been made on how the case would be handled, the official said that, barring extraordinary concessions by Microsoft, the states' lawsuit probably would be filed within the next 10 days in federal court in Washington.

The Justice Department also is looking into Microsoft's business practices and considering a broad antitrust case under the federal Sherman Act, which prohibits companies with legal monopolies from using their market influence solely to inhibit competition. The government said it hasn't reached a decision on whether to sue.

The states probably would file together as a group but separately from the federal government, said the state official, who spoke only on condition of anonymity. There would be "a lot of common ground" between the states' and Justice's concerns.

Meanwhile Friday, Justice Department antitrust chief Joel Klein sent a strong signal that he is leaning toward filing an antitrust suit against Microsoft.

"Microsoft, like any corporation, would benefit from strong domestic competition," Klein told a business forum. When asked later if the dynamics of the high-tech industry in which Microsoft competes would affect his decision, he said, "I will not let complexity deter me from engagement."

Meanwhile, Microsoft's home state of Washington acknowledged Friday that it has opened an antitrust investigation of the company. Civil subpoenas were sent to Microsoft last week, but a spokesman for the Washington state attorney general said it "doesn't mean we are taking any enforcement action at this point."

Still, Microsoft is under scrutiny even on its home turf, where it is one of the state's most powerful companies and has wide political influence. Microsoft Chairman Bill Gates sat next to Washington Gov. Gary Locke this week at the NBA playoff game between the Lakers and the Seattle SuperSonics.

Microsoft plans to ship the next version of its operating system, Windows 98, to computer makers Friday and offer it for sale at retail June 25. But the states don't necessarily consider next week a do-or-die date for action.

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