Mass., W.Va. Take on Microsoft Appeal

Want antitrust remedy to have tougher penalties.

Two of the states that balked at the settlement worked out between Microsoft Corp. and the U.S. Department of Justice will take on the software company themselves in an appeal that seeks stiffer punishment and greater control over the company for its monopolistic behavior.

Massachusetts and West Virginia will join forces in the appeal. Massachusetts Attorney General Thomas Reilly filed notice of the appeal late last month, and West Virginia officials joined the action early last week.

Reilly said his office is committed to challenging last months ruling of U.S. District Judge Colleen Kollar-Kotelly in the landmark antitrust suit against Microsoft, of Redmond, Wash.

"We were disappointed that [Kollar-Kotelly] did little more than accept Microsofts loophole-filled deal," Reilly said. "There is nothing here to change Microsofts business practices."

West Virginia Attorney General Darrell McGraw said his office believes that while the U.S. District Court found Microsoft violated federal and state antitrust laws, "the court largely sided with Microsoft in its decision on how to remedy the unlawful conduct." McGraw said the court failed to impose sanctions that will remedy unlawful commingling of software code that the federal court agreed was illegal.

"No reputable government should ... allow an adjudicated lawbreaker to retain their ill-gotten gains," said McGraw.

Reilly applauded West Virginias decision to join the appeal.

"Competition is a key to what we are doing here," Reilly said. "Competition spurs new ideas, spurs new technology, spurs jobs. Competition gets things going again. It is vital to the economy.

"This case is also about accountability. Some companies feel they are not bound by the law," he added. "The remedy must send a message that breaking the law does not pay."

Officials in the Massachusetts attorney generals office could not estimate how long their appeal might last, adding that an appeals court judge will have to issue a schedule. Officials said the cost will be limited to attorneys fees, which they hope to recover as part of the ultimate settlement.

Not everyone agreed with the two states decision.

Jonathan Zuck, president of the Washington-based Association for Competitive Technology, called the appeal "very puzzling."


Seven states are accepting the ruling requiring Microsoft to:
  • Allow OEMs to install non-Microsoft products
  • Give OEMs and users more control of Windows functions
  • Not retaliate against OEMs that support rival products
    Appealing states are looking to force Microsoft to:
  • Unbundle Windows from its middleware
  • Disclose more technical information
  • Include handheld and Web services technologies in remedy
Zuck said the outcome of the case has "fundamentally changed the way Microsoft does business, and consumers and the industry are already seeing the benefits.

"Nearly every legal scholar believes [the decision] to be well-reasoned and beyond appeal," Zuck added. "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."

The move to appeal comes in the wake of the remedy ruling by Kollar-Kotelly earlier last month, which relied heavily on the federal settlement proposal signed last year. Although Kollar-Kotelly rejected as overly broad much of the tougher penalties proposed by the nine dissenting states, she did incorporate some elements of the alternative proposal into her ruling.

In an executive summary filed with the 300-page opinion, the judge took the states to task for overreaching in the remedy stage of the case. She admonished them for seeking "to gather all existing complaints regarding Microsofts business practices and bring them before the court at this late stage in the case."