Microsoft, U.S. Refine Antitrust Settlement

Microsoft

In legal briefs filed with U.S. District Judge Colleen Kollar-Kotelly late Wednesday night, both sides described the changes as refinements.

"The modifications announced today simply make this effective settlement even better," said Charles James, the department's antitrust chief.

The department filed the changes as part of a 239-page brief defending the settlement deal and responding to public comments submitted earlier this year.

Microsoft said the changes would "more accurately reflect the intent of the parties and address some of the misperceptions of the proposed decree."

Microsoft reached the deal with the Justice Department in November to settle the nearly four-year-old case by, among other things, agreeing to give computer makers more freedom to feature rival software on the machines they sell.

Nine of the 18 states in the lawsuit agreed to sign on to the deal, but nine others are still pursuing the case and seeking tougher sanctions against Microsoft to prevent future antitrust violations.

In the brief, Microsoft agreed to broaden some technical definitions and redefine some terms that critics had argued could be used as loopholes to get around the restrictions in the deal. Critics were saying the unmodified agreement would allow the company to seize computer makers' patented technologies.

Microsoft called that kind of criticism "specious," but it said some of the changes would make it "crystal clear" that the company would not try to wriggle out of its obligations.

Microsoft said it also had agreed to drop a provision in the agreement that had been singled out for criticism by the nine dissenting state attorneys general.

The provision required computer makers to license some intellectual property to Microsoft. The states said the company had already used it "to adopt significantly more onerous licensing terms and to impose them on the (computer manufacturers)."

In a landmark ruling on the case in June, a federal appeals court upheld a lower court conclusion that Microsoft had used illegal tactics to maintain its Windows monopoly but rejected splitting the company in two to prevent future violations.

The dissenting states, which include California, Massachusetts and Iowa, say their remedies would close a series of loopholes in the Justice Department settlement. It also would force Microsoft to sell a cheaper, stripped-down version of its monopoly Windows operating system and disclose the inner workings of Windows.

In a separate filing on Wednesday, Microsoft asked Kollar-Kotelly to dismiss the stringent antitrust sanctions that some state attorneys general want to impose on it, saying the states are trying to "displace" the Justice Department's decision to settle the case.

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 6-8 weeks.

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