States Back Off Demand for Modular Windows

They say information sharing is more important than dismantling Microsoft's flagship product.

WASHINGTON--Attorneys for the states seeking tough penalties for Microsoft Corp.s antitrust actions have backed off of a demand for a modular version of the Windows operating system, saying information sharing is more important than dismantling the Redmond, Wash., software makers flagship product.

The statement from attorney Steven Kuney came at the beginning of closing arguments in federal district court here this morning. Kuney began his closing by prioritizing remedy demands in response to an 11th hour order from the judge in the case. Judge Colleen Kollar-Kotelly surprised both sides just hours before closing arguments were set to begin with an order that indicates she is looking for a compromise to both the Department of Justice-approved settlement and the request for stricter remedies from the dissenting states. The judge asked both sides to prioritize issues, identify middle ground and focus on how each proposal could be modified.

Speaking for the nine dissenting states and the District of Columbia, Kuney said that disclosing APIs and other technical information is more important than creating a modular version of the Windows operating system. In fact, Kuney said that a modular Windows, which was the first provision in the states proposal, is only the fourth most important remedy behind information disclosure, more flexibility and retaliation protection for OEMs. Kuney and fellow states counsel Atty. Brendan Sullivan are expected to wrap up their part of the closing arguments early this afternoon. Microsoft attorneys John Warden and Dan Webb will make their case later today and are expected to wrap up by days end.

In response to the judges early morning directive to focus on compromise and address modifications to the current federal agreement with Microsoft, Kuney said that the scope of the DOJ settlement would have to be broadened to include emerging technologies such as server operating systems, handheld devices and set-top boxes. Also the definition of interoperability would have to be clarified, and the settlements many exemptions would have to be removed.

In addition to presiding over the states request for tougher remedies, Kollar-Kotelly is reviewing the federal settlement proposal, which was crafted last year after the U.S. Court of Appeals for the District of Columbia Circuit upheld District Court Judge Thomas Penfield Jacksons ruling that Microsoft illegally maintained a monopoly in personal computer operating systems. However, the appeals court rejected Jacksons order to split Microsoft in two (and removed Jackson from the case), and instead directed Kollar-Kotelly to determine behavioral remedies for the illegal conduct.

The states pursuing strict remedies are California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West Virginia plus the District of Columbia.

Maintaining that the states proposal exceeds the scope of the appeals courts order, Microsoft attorneys are expected to argue today that the remedies are neither necessary nor feasible.

Microsoft has painted the states suit as a case fueled by a competitor seeking to use the legal system to stymie the companys foray into new markets.

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