Experts: Microsoft's Latest Concessions Not Likely To Satisfy Dissenting States

The company's revised proposed settlement with the U.S. Justice Department, disclosed just 12 days before its remedy hearings begin in Washington, addresses a number of potential loopholes identified by opponents to the settlement carved out with the government last November.

In the brief, Microsoft agreed to redefine terms that critics had argued could be used as loopholes to get around the restrictions in the deal. One specific provision required computer manufacturers to license some intellectual property to Microsoft.

However, it's not likely to pass muster with the nine dissenting state attorneys general, who want to see broader, more open access to Microsoft code, stronger enforcement and an extension of the coverage period to 10 years from the five years currently proposed. The remedy hearings are scheduled to begin on March 11.

"The proposed changes will not satisfy the dissenting states," said Hillard Sterling, a partner at Chicago law firm Gordon and Glickson. "The changes are relatively minor, addressing some cracks but staying away from any structural changes. The dissenting states will argue that these additional tweaks do nothing to address the flaws underlying the deal. The fact remains that the proposed deal, even as amended, lets Microsoft proceed largely with business as usual."

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One Microsoft systems integrator and managed service provider wants the case over with, but predicts, too, that the new changes won't push it past the goal line. "Massachusetts is one of the states opposing this and I'd be surprised if all nine states said, 'This is good enough. Let's move on,'" said Joe Young, president and CEO of Global Data Systems, Pembroke, Mass.

One economist said the concessions address an important issue for OEMs, but not the attorneys general. "These are good revisions that clarify the terms of the settlement and ensure that the settlement will not be used to bypass the rights of patent holders," said Nicholas Economides, a professor of economics at New York University's School of Business. "But the nine litigating states have far greater demands and will not be satisfied with the revisions of the settlement."

On Thursday, Microsoft also asked the court to dismiss the lawsuit filed by the nine dissenting states and D.C. as unconstitutional.