California to Seek Microsoft Antitrust Extension

WASHINGTON—California and six other states want the federal government to extend the Microsoft antitrust consent decree by another five years. The group plans to formally petition for the extension by October, just a month before most provisions of the decree are due to expire.

Stephen Houck, the attorney representing Californias interests in the 2002 landmark antitrust settlement, said Microsoft still dominates the operating systems and Web browser markets. “They still have the ability to undercut the market,” Houck said. “There hasnt been enough time to fulfill the remedy [of the consent decree].”

Microsoft has already agreed to extend until 2009 portions of the consent decree involving server protocol licensing. Houck said that deadline should be pushed back another three years in addition to extending the agreement on middleware for five additional years.

Joining California in the planned extension request are Connecticut, Iowa, Kansas, Minnesota, Massachusetts and the District of Columbia.

“We need a continuation of remedial structures. If Microsoft practices what it preaches—and we hope it will—it will have a minimum impact on Microsoft. Microsofts market power remains undiminished,” Houck said. “

New York, the Department of Justice and Microsoft all contend the time has come to complete the consent decree. Even U.S. District Judge Colleen Kollar-Kotelly, who presided over a large part of the antitrust trial and has overseen the compliance portion of the deal, said it would appear, “Microsoft will be in compliance [by Nov. 12].”

Kollar-Kotelly reminded Houck that the goal of the settlement was “never to reduce Microsoft market share.” The original ruling found Microsoft did not build its dominant market share through illegal, anticompetitive behavior. Instead, the court ruled, Microsoft maintained it share through antitrust violations, particularly in the area of middleware.

Seven attorneys say Microsoft is still a monopoly. Click here to read more.

“The issue here is compliance as opposed to effectiveness,” she said.

Nevertheless, Kollar-Kotelly said she would accept Californias request for an extension but warned Houck, “If there are going to be requests for extending it, there has to be an identifiable purpose.”

Microsoft attorney Rick Rule called the California request to extend compliance for server protocol licensing premature since Redmond and the government only agreed to the 2009 extension in May. Microsoft spokesman Jack Evans said the software giant had no immediate comment on Californias request.

Lars Liebeler, an antitrust attorney for the Washington IT trade group CompTIA, said in a statement an extension is not warranted.

“The raw marketplace data indicate that the applications software and related markets are highly competitive, fast moving and highly innovative,” Liebeler said. “In light of the many new non-Microsoft products that are available and the advent of Web-based applications and functions, consumers are enjoying a wide array of choices.

“Given the advance of technology in the field, Microsofts high market share in the operating system market is not an indication of an overall lack of competition or innovation, nor does it independently justify an extension of the consent decree.”

The California group is only the latest seeking to derail a final compliance ruling by Kollar-Kotelly. Google has complained that Windows Vista desktop search is configured to favor Microsoft over other desktop search rivals. Microsoft responded by promising to add links to the Start Menu on Windows Explorer that would allow users to choose multiple search engines.

Check out eWEEK.coms for Microsoft and Windows news, views and analysis.