Two US states seek tougher Microsoft penalties

Two US states have asked a federal appeals court to push for tougher restrictions against Microsoft, arguing that terms of a...

Two US states have asked a federal appeals court to push for tougher restrictions against Microsoft, arguing that terms of a settlement reached in its antitrust case with the US government do little to redress the company's anticompetitive behaviour.

Massachusetts and West Virginia, which have so far have refused to settle the case against Microsoft, argued that sanctions agreed to in November by the Department of Justice, 17 states and Microsoft are inadequate to restore competition in the software industry and correct the effects of Microsoft illegal behaviour.

"The flaws in the remedy adopted by the district court are profound. It does not fulfill even the most basic mission of stopping all of the practices [the appeals court] found unlawful," the states argued in their court brief.

"The district court's remedy will not restore competition, deny Microsoft the fruits of its illegal conduct or otherwise satisfy [the appeals court's] remedial objectives," the states wrote.

A Microsoft spokesman defended the settlement and said his company looked forward to responding to the states' brief in court papers it is due to file next month.

District Court Judge Colleen Kollar-Kotelly approved the terms of the settlement in November, which had been agreed to by the DOJ, Microsoft and nine of the US states suing the company.

The settlement imposed certain business restrictions on Microsoft, such as barring it from punishing PC makers who promote software that competes with Microsoft products, but it largely ignored far tougher measures that had been proposed by nine "non-settling" states. They included forcing Microsoft to port its Office applications suite to other operating systems and making its Internet Explorer browser open source.

Seven of the nine "hold-out" states eventually agreed to the DOJ's settlement, leaving Massachusetts and West Virginia. Those two states are asking the appeals court to decide whether Kollar-Kotelly erred in approving the settlement.

In yesterday's court brief, the two states argued that the district court failed in its "most basic goal" of preventing Microsoft from carrying on with behaviour that had been ruled unlawful during the course of the trial. For example, Microsoft was found to have maintained its monopoly unlawfully by, among other things, "commingling" software code for Internet Explorer with its Windows operating system, making it hard to remove its browser without also damaging Windows.

However, the settlement required only that the company allow PC makers and others to remove the icons and shortcuts for the browser, rather than the application itself.

"The path to an effective remedy here has not been an easy or a quick one," the states wrote in their conclusion, "but that is no reason to abandon [the appeals court's] remedial goals, or to let the passage of time preclude a grant of meaningful relief in a case of this importance."

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