2 States Urge Stiffer Penalties in Microsoft Antitrust Settlement
Two states that refused to settle the Microsoft Corp. antitrust case sought tougher penalties Monday, arguing that a deal negotiated with the Bush administration was inadequate to constrain the software company.
Massachusetts and West Virginia urged a federal appeals court to instruct the trial judge to impose tougher sanctions than those included in a settlement the judge approved among Microsoft, the Justice Department and 17 other states.
In a case that began nearly a decade ago, lawyers for the two states said the settlement was profoundly flawed and “does not fulfill even the most basic mission of stopping all of the practices” committed by Microsoft.
“The district court’s remedy will not restore competition, deny Microsoft the fruits of its illegal conduct or otherwise satisfy this [appeals] court’s remedial objectives,” the states wrote.
Microsoft’s legal filings are due next month.
“The district court thoroughly reviewed these issues last year and issued comprehensive rulings that represent a fair resolution of this case,” spokesman Jim Desler said. “These rulings have been agreed to by the Department of Justice, virtually all the states that filed suit against Microsoft and only two states and a couple of competitor groups are pressing forward.”
Courtroom arguments before the appellate judges are scheduled to begin in November.
The long-running court battle -- the most significant antitrust case in a generation -- culminated in November when U.S. District Judge Colleen Kollar-Kotelly accepted nearly all the settlement provisions. She rebuffed arguments by nine states and the District of Columbia that tougher sanctions were essential to restore competition in the computer industry.
All the states except Massachusetts and West Virginia eventually joined the settlement, which gives Microsoft’s rivals more flexibility to offer competing software features on computers running its flagship Windows operating system.
“Microsoft has been found guilty of predatory practices yet allowed to continue to crush innovation, competition and consumer choice in the computer software industry,” Massachusetts Atty. Gen. Thomas Reilly said Monday.
Two Washington-based industry groups -- the Software and Information Industry Assn. and the Computer and Communications Industry Assn. -- also appealed Kollar-Kotelly’s approval of the settlement. They said the deal included “wholly inadequate” provisions to curb Microsoft’s behavior; some of the trade groups’ members include Microsoft rivals.
“The court approved a consent decree that neither cures what had been done illegally in the past nor prevents illegal conduct in the future,” lawyers for the groups wrote Monday.
The two holdout states are carrying their fight to a U.S. appeals court that has handed Redmond, Wash.-based Microsoft considerable victories. It overturned another judge’s order that Microsoft remove its Web browser software from Windows, and it threw out two of the government’s three antitrust claims against the firm.
