Massachusetts First To Oppose Microsoft Settlement

As a federal court prepares to hear commentary on last week's proposed antitrust settlement between Microsoft and the Justice Department, the District of Columbia and the 18 states and that joined the lawsuit are split on whether to support it.

U.S. District Court Judge Colleen Kollar-Kotelly is set to hold a hearing Tuesday morning in Washington, D.C., during which lawyers for U.S. states that joined the 1998 Justice Department antitrust lawsuit against Microsoft will reveal whether they will sign the agreement or challenge it. Microsoft and the Justice Department announced Nov. 1 a tentative settlement to their antitrust case, which had its roots in litigation extending back to the early 1990s. The five-year agreement would give PC makers more flexibility to alter the Windows desktop, ban exclusive and retaliatory contracts by Microsoft, require Microsoft to disclose the APIs its middleware uses to talk to Windows, and establish a three-person technical committee to oversee Microsoft's compliance.

But several states oppose the settlement. A spokeswoman for Massachusetts Attorney General Tom Reilly says the deal contains "too many exceptions" that let Microsoft evade restrictions on its behavior. California is also said to oppose the deal.

New York and Connecticut, however, are reportedly nearly ready to sign the Justice Department agreement.

Kollar-Kotelly initially set a Nov. 2 deadline for Microsoft and the government to reach a settlement before she would began hearings to determine a court-ordered remedy in the case. Last week, she extended that deadline to Nov. 6. The states' new lawyer, Brendan Sullivan--who represented Oliver North during the 1980s Iran-Contra congressional hearings--told Kollar-Kotelly last week that the states needed extra time to assure that "we are not trading a settlement of litigation today for a decade of litigation tomorrow."

The Justice Department and states in recent days have taken heat from computer-industry execs and trade groups who say terms of the proposed settlement are too lenient to Microsoft. AOL Time Warner and Sun Microsystems were among the companies that made public comments. The Nov. 1 settlement agreement doesn't bar Microsoft from bundling new software with Windows--a tenet of the initial grievances that led the government to pursue its case against Microsoft in the early '90s, and to file the landmark antitrust suit against the company in 1998.

Any settlement between Microsoft and the government must be approved by the district court. If an agreement can't be reached, remedy hearings in the case would begin March 11. Separately, Kollar-Kotelly will hold a hearing on whether the settlement is in the public interest, as required under the federal Tunney Act.