AGs Push for Stiff Microsoft Punishment

With the federal government's anti-trust case against Microsoft Corp. ready to return to the courtroom, two state attorneys general who also are among the plaintiffs are turning up the heat.

With the federal governments anti-trust case against Microsoft Corp. ready to return to the courtroom, two state attorneys general who also are among the plaintiffs are turning up the heat.

N.Y. Attorney General Eliot Spitzer and his California counterpart, Bill Lockyer, on Monday said they will pursue "strong and effective relief that will promote competition and consumer choice in the marketplace."

The statements follow last weeks public announcement by the U.S. Justice Department that it would not pursue the breakup of Microsoft or the tying count of the original complaint-essentially whether the bundling of the Internet Explorer browser to the Windows 95 and 98 operating systems was illegal.

But Lockyer and Spitzer on Monday left no doubt that they would push aggressively for Microsoft to be punished-with or without the Justice Department-and that any remedy needed to address not just past harm but future behavior, most notably the upcoming Windows XP operating system.

They also were clear that they would press for additional remedies if they disagreed with those sought by the Justice Department.

"We look forward to continuing to work with the Department of Justice in the proceedings that are about to begin before the trial court, but will, if necessary to protect the public, press for remedies that go beyond those requested by the Department," they said in a prepared statement.

"Part of the remedy must be forward-looking. Therefore we will insist that Windows XP-Microsofts latest version of its personal computer operating system-receive close scrutiny in arriving at a judicially ordered remedy.

"As the U.S. Court of Appeals found, some of the ways that Microsoft unlawfully crushed competition from Netscape included bundling Microsofts Internet browser to its Windows operating system, and pressuring industry computer makers into refraining from adding Netscapes browser to the computers that they sold. It is imperative that Microsoft not have another opportunity to use Windows XP to suppress competition in emerging Internet areas," they said.

Last week, the 18 state attorneys general listed among the plaintiffs in the case supported the move not to pursue the breakup of Microsoft. Bob Brammer, a spokesman for Iowa Attorney General Tom Miller, who leads the 18-state Microsoft Working Group, told eWEEK at that time that "we have a strong and unanimous ruling from the Court of Appeals and are pushing to move to a speedy remedy. We also, as always, remain open to settlement discussions with Microsoft."

Antitrust experts and lawyers expressed surprise at the Justice Departments public announcement, saying it took one of its strongest bargaining chips off the table.

Dana Hayer, an antitrust expert at Fenwick & West LLP, in San Francisco, who previously worked in the Justice Departments antitrust division and was involved in the Microsoft case at that time, said he now expected settlement negotiations to continue in earnest. These could be completed as soon as the end of the year.

"While I think the Justice Department has weakened its hand by the announcement, it still has a strong ruling upheld by the Appeals Court and the new District Court judge is unlikely to have much patience for delaying tactics around a settlement or remedy. So the case should move forward fairly quickly," he said.

The Appeals Court last month ordered the case returned to the District Court for a new judge to reconsider the remedies imposed by Judge Thomas Penfield Jackson. Judge Colleen Kollar-Kotelly was given the case and Microsoft, the Justice Department and 18 states are scheduled to meet with her over the next two weeks.