Judge Backs Terms of U.S. Settlement in Microsoft Case

Judge Colleen Kollar-Kotelly of Federal District Court in Washington did impose some new obligations on Microsoft that were not included in the settlement last November, requiring the software maker to disclose more information to competitors about its Windows operating system and to install a compliance committee made up of Microsoft board members.

But taking a narrow view of the case, the judge imposed few new restrictions that would slow Microsoft's aggressive push into new markets.

She largely dismissed the contention by nine states that broader restrictions on Microsoft were necessary to restore competition in the computer software industry. Instead, Judge Kollar-Kotelly criticized the states for suggesting that Microsoft should be punished for actions beyond those a federal appeals court found it liable for last year.

"This suit, however remarkable, is not the vehicle through which plaintiffs can resolve all existing allegations of anticompetitive conduct which have not been proved or for which liability has not been ascribed," Judge Kollar-Kotelly wrote.

But for many of the economists, legal scholars and rival software developers who have been involved in the long-running case, the judge's decision falls far short of preventing Microsoft from abusing its market power in the future.

"We urged the court to look ahead, to expand the doctrine into new business areas," said Bill Lockyer, the California state attorney general who helped lead and finance the states' challenge after the federal settlement. "The court said, `I can't do that, if you want that you need to file a new lawsuit.' That obviously remains an option."

The long-anticipated ruling on how the court would restrict Microsoft's behavior comes more than a year after a federal appeals court found that Microsoft had repeatedly violated antitrust laws. The case has been widely viewed as the most important antitrust action since the government's attack on Standard Oil at the turn of the last century.

In a nod to the dissenting states, Judge Kollar-Kotelly ordered Microsoft to refrain from "threatening" retaliation as well. And in what could be a significant step, she allowed that the restrictions on Microsoft should apply to the server operating systems that are central to most business networks, in addition to personal computer operating systems.

Still, she granted almost none of the core proposals the states raised during an eight-week trial last spring.

"I'm sort of stunned by it," said Andrew Gavil, an antitrust law professor at Howard University who has been critical of the Justice Department settlement. "I can't imagine a more sweeping victory for the approach that the government and Microsoft took and the states couldn't get less out of it than they did."

Microsoft has long argued that it needs to be free to construct its software however it sees fit," Mr. Gavil said. "She bought into Microsoft's longstanding argument that there was very little relation between Microsoft's anticompetitive acts and their dominant position."

He said there was not much room for an appeal, and that it would be "very difficult to convince the court of appeals that she abused her discretion."
http://www.nytimes.com/2002/11/02/technology/02SOFT.html?pagewanted=all&position=top