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Wed, May 07, 2003 - Page 12 News List

Two US states challenging Microsoft monopoly ruling

COURT MOVE Massachusetts and West Virginia have filed appeals, arguing that the company's settlement does not even begin to remedy its illegal actions

BLOOMBERG , WASHINGTON

Microsoft Corp's settlement of the US government's antitrust suit won't restore competition or prevent the world's largest software maker from continuing to bully competitors, Massachusetts and West Virginia said in court papers.

The attorneys general of the two states appealed a trial judge's refusal to impose tougher remedies than Microsoft agreed to in the settlement negotiated after an appeals court held the company illegally protected its Windows monopoly for personal computer operating software.

Massachusetts and West Virginia told the same appeals court that US District Judge Colleen Kollar-Kotelly failed to carry out her mandate when she approved the settlement and rejected proposals to put more restrictions on Microsoft's business practices.

"The flaws in the remedy adopted by the district court are profound," the two states said.

"It does not fulfill even the most basic mission of stopping all the practices" found illegal, and it won't "restore competition and deny Microsoft the fruits of its illegal conduct," Massachusetts Attorney General Thomas Reilly and West Virginia Attorney General Darrell McGraw said in their appeal brief.

The full US Court of Appeals for the District of Columbia Circuit is scheduled to hear arguments Nov. 4.

The settlement, which was initially rejected by half the 18 states that joined the Justice Department in the case, requires Microsoft to give computer makers freedom to promote rival software that compete with its Windows Media Player or the Internet Explorer Web browser.

Massachusetts and West Virginia argued that Kollar-Kotelly defied the appeals court's June 2001 order to prevent Microsoft from continuing to "commingle" browser and operating software code to protect its illegal monopoly.

The states urged the court to direct Kollar-Kotelly to order "a remedy that will ensure that Microsoft's unlawful conduct is met with more than a request that the company not repeat its transgressions."

The judge held 32 days of hearings last year on the proposals by nine states, led by California, Iowa and Connecticut. All the states except West Virginia and Massachusetts dropped their fight against Microsoft after she approved the settlement in November.

Microsoft spokesman Jim Desler said Kollar-Kotelly's rulings "represent a fair resolution of this case" and noted that "only two" states are still pressing the case.

Kollar-Kotelly rejected the nine states' proposals to force Microsoft to make a "modular" version of Windows from which computer makers could easily remove the Internet Explorer browser.

She also refused to force Microsoft to make broad disclosures of computer code that competitors need to write programs that run on Windows, which powers 95 percent of the world's PCs.

A settlement provision allowing computer makers to hide access to Internet Explorer without removing any code won Kollar-Kotelly's approval "even though no evidence established that such remedy would address the unlawful conduct identified by this court and substantial evidence established that it would not," the states said.

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