Microsoft, DOJ on An Uneasy Road

Microsoft Corp. and the Federal Government are headed for a showdown over exactly what remedies should be imposed on the software maker for its anti-competitive behavior.

The two parties disagreed on nearly every issue in last weeks joint status report filed before Washington District Judge Colleen Kollar-Kotelly, leading antitrust experts to caution that the magnitude of the differences could make a negotiated settlement difficult unless compromises are met.

In last weeks filing, the government said it is seeking the conduct remedies imposed by District Judge Thomas Penfield Jackson, the cases original judge. But Microsoft, of Redmond, Wash., argued that the recent findings by the Appeals Court for the District of Columbia Circuit had “drastically altered” the scope of its liability under the original order and, as such, those remedies were improper.

But the government disagreed, saying the relief was needed to “unfetter” the market from Microsofts anti-competitive conduct; to deny Microsoft “the fruits” of its violations of the Sherman Antitrust Act; and to “ensure there remains no practices likely to result in monopolization in the future,” according to its filing. The filing also made clear the DOJ intends to introduce evidence of Microsofts ongoing conduct, “especially with regard to Windows XP.”

Antitrust experts said that while it was no surprise that the two parties had such significant fundamental disagreements, this could make a negotiated settlement extremely difficult.