Other States Wont Join Appeal

 
 
By Darryl K. Taft  |  Posted 2002-11-30
 
 
 

Despite the Massachusetts attorney generals decision to appeal the ruling in the Microsoft case, other states that sought stiffer penalties against the software giant said they wish their colleagues well but will not pursue further litigation.

Thomas Miller, attorney general for Iowa, who lead the dissenting states case against Microsoft, issued a statement saying: "Seven states and the District of Columbia will not appeal Judge Kollar-Kotellys decree in the Microsoft antitrust case. We will move on to enforcing the decree on behalf of consumers and fair competition. Our colleagues from Massachusetts are appealing the decision, and we wish them well. There are serious issues subject to appeal." Only West Virginia remains undecided and will issue a statement about its future legal direction on Monday, Miller said.

In addition, because the states "won" the case, Microsoft must pay the states legal fees, Miller said. "Microsoft will pay the states $28.6 million," he said. "As is traditional when the plaintiff prevails in an antitrust case, Microsoft will pay the States $25 million for their attorney fees and costs of the litigation. Microsoft also is paying $3.6 that million the states will use for continued enforcement and compliance. The compliance funds will be used by the states for an aggressive enforcement effort. The States retain the option of asking the courts for additional enforcement funds."

Mark Cooper, the research director for the Washington-based Consumer Federation of America, lauded the decision of Massachusetts Attorney General Tom Reilly to continue to wage a legal battle with Microsoft.

"We applaud Attorney General Reilly for deciding to appeal the remedy recently issued in the Microsoft case," Cooper said. "This action seeks to defend critical antitrust principles that were established in the unanimous Appeals Court ruling that found Microsoft guilty of violating the antitrust laws. We view the antitrust laws as the front line of consumer protection in the new economy. As we made clear to the District Court in our joint filing under the Tunney Act, we believe the Appeals court adopted that view in its ruling. The District Court failed to give full and proper weight to the findings of guilt."

Miller agreed on that point. "Microsoft broke the law," he said. "That was the judgment of the Federal District Court and a unanimous U.S. Court of Appeals. The company was judged to be a monopolist that abused its monopoly power and violated the nations antitrust laws."

But not all share the same view. Jonathan Zuck, president of the Washington-based Association for Competititve Technology, said Reillys decision to appeal "is very puzzling, especially given the success that these attorneys general had in the case. They fundamentally changed the way Microsoft does business, and consumers and the industry are already seeing the benefits. "The vast majority of the industry cheered the decision and the end of the long running case," he added. "Finally, nearly every legal scholar who has reviewed the judges decision believes it to be well reasoned and beyond appeal. The interests of consumers and the technology industry will be best served by strong enforcement of this decree and an end to the long-running litigation and uncertainty. We hope that Attorney General Reilly will eventually realize this too."

The case "exposed the companys illegal practices, and now the world looks differently at Microsoft," Miller said. "Indeed, the world is watching Microsofts conduct. Competitors, entrepreneurs and the public are watching. The Court - which retained jurisdiction - is watching the conduct of Microsoft. And the states are watching. We will be vigilant and hold the company to compliance, to make certain that Microsoft does not abuse its extraordinary market power in violation of the law and the courts decisions."

Miller said the states made progress in the case above that made by the U.S. Department of Justice and the settling states in their settlement. "Loopholes were closed," he said. "We strengthened the ability of entrepreneurs to create and offer products that would work with Microsofts Windows operating system. The court strengthened enforcement procedures by ordering independent Microsoft board member oversight and requiring a compliance officer to report if there are possible violations, and the Court retained jurisdiction in the case. This antitrust case has been good for competition, good for innovation, good for business, and, most important, good for consumers in all our states. We will continue to pursue these benefits through vigilant enforcement."

But Cooper takes issue with that. "We believe the American consumer will continue to be victimized by Microsofts abuse of monopoly power under the proposed remedy," Cooper said. "More importantly, the court has so narrowed the effect of the antitrust laws as to render them useless to promote competition and protect consumers. We are confident that several aspects of the remedy will be strengthened as a result of this appeal. Attorney General Reilly has made the responsible decision not to seek a stay, which allows the remedy to move forward, while he fights for more vigorous principles of competition and consumer protection under the antitrust laws. This case will set the standard for antitrust in the 21st century and the remedy deserves a thorough review by the Appeals Court."

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