Two State AGs Seek Strong Remedies

Pair say they will pursue 'strong and effective relief' in Microsoft case.

As the department of justice and the 18 state attorneys general involved in the antitrust case against Microsoft Corp. prepare to return to court, two state attorneys general are turning up the heat.

Eliot Spitzer, the attorney general for New York, and Bill Lockyer, the attorney general for California, last week said they will pursue "strong and effective relief that will promote competition and consumer choice in the marketplace."

This declaration follows the announcement by the Justice Department that it will not pursue the breakup of Microsoft and will also not pursue the Web-browser-tying count of the original complaint.

But Spitzer and Lockyer last week left no doubt that they will be pushing for strong and effective relief, with or without the Justice Department, and that the remedy needs to address not just past harm but future behavior—most notably the upcoming Windows XP operating system.

They also made it 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."

Last week, the 18 state attorneys general 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, said, "We have a strong and unanimous ruling from the [U.S. Court of Appeals for the District of Columbia Circuit] 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 firmly and forever 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 expects 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," Hayer said.

The appeals court last month ordered the case returned to the U.S. District Court for the District of Columbia 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 the 18 state attorneys general are slated to meet with her over the next two weeks.