This will make it tough for anyone to invent new terminology and thereby get out of some annoying sub-subparagraph.
Nov 1, 2002
Those are the opposite scenarios portrayed by Microsoft's rivals and company chairman Bill Gates. Microsoft's stock price dropped in mid-afternoon trading in advance of the ruling.
U.S. District Judge Colleen Kollar-Kotelly said she will announce after the financial markets close whether she accepts or rejects a landmark antitrust settlement reached by Microsoft, the federal government and nine states. At the same time, she may say whether she endorses the harsher penalties pursued by nine other states who did not sign onto the deal.
But appeals are likely in a complicated case that has already lasted four years.
"It might not be resolved for another two years," University of Baltimore law professor Robert Lande said. "No one should count their winnings yet."
Microsoft was found to have violated antitrust laws, illegally maintaining its monopoly over computer software operating systems by strong-arming competitors. But an appeals court threw out a previous order that would break the company in two, leaving Kollar-Kotelly to decide how Microsoft should be punished.
The settlement would prevent Microsoft from participating in exclusive deals that could hurt competitors; require uniform contract terms for computer manufacturers; allow manufacturers and customers to remove icons for some Microsoft features; and require that the company release some technical data so software developers can write programs for Windows that work as well as Microsoft products do.
Justice prosecutors and Microsoft say the deal will immediately benefit consumers. Microsoft has already started complying with the deal by distributing technical data and releasing an update to Windows XP that permits the removal of Microsoft icons.
Some Microsoft competitors, such as Sun Microsystems, have told the Justice Department that Microsoft's compliance measures aren't adequate. Lawyers for the government and the settling states are investigating those complaints.
The nine states still suing Microsoft, led by Iowa, California and Connecticut, spent two months trying to convince Kollar-Kotelly that those penalties aren't enough to give Microsoft's rivals a fair chance to compete with the software giant, whose Windows operating system and productivity software run on over 90 percent of home and business computers.
Those states want Microsoft to divulge more technical information, give computer manufacturers more freedom in how they package Windows in their systems and allow users to completely remove some Microsoft features from Windows rather than just hide access to them.
Gates said during three days of testimony in the antitrust case that the added penalties would unfairly confiscate Microsoft's intellectual property, cause mass layoffs and force the company's research and development efforts "into a 10-year period of hibernation."
Microsoft's stock dropped over 2 percent to $52.28 on the Nasdaq exchange in Friday mid-afternoon trading.
The judge was announcing her decision just days before national elections. In three of the nine states that agreed to settle the case along with the Justice Department - Illinois, Michigan and Wisconsin - those attorneys general are running for governor this year, and two more active in the case are running for governor next year, in Kentucky and Louisiana.
In Connecticut, where Richard Blumenthal is one of the most aggressive attorneys general advocating harsher penalties against Microsoft, his re-election opponent accused him Thursday of being "obsessive" in his pursuit of the software maker. Martha Dean, a Republican, praised Microsoft as a successful business and said penalties against it could hurt the state's pension fund and citizens' retirement investments.
Under federal antitrust rules, Kollar-Kotelly does not have authority to change the terms of the settlement. She can approve the deal or reject it, although she can offer suggestions to lawyers to change the proposal in ways that would win her ultimate approval.
Lande predicted that the five-month delay between the hearings and the ruling could be good news for the suing states.
"If all she was going to do was rubber-stamp the settlement between the Department of Justice and Microsoft and say that the states get nothing, she could have done that in two or three months," Lande said. "I think it means the states are going to get something."
Since the federal and state cases are so intertwined and complicated, no one knows just what that something will be. Lande said Kollar-Kotelly's hardest job was to make sure that the settlement order and any added penalties don't send Microsoft mixed signals - particularly since Microsoft already has indicated that it plans to appeal to the Supreme Court if necessary.
"She wants to be really sure that there's no inconsistencies," Lande said. "Microsoft is going to appeal anyway, but one of the things they would say is that she's being inconsistent."
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On the Net:
Microsoft: http://www.microsoft.com
Justice Department: http://www.usdoj.gov
U.S. District Court for the District of Columbia: http://www.dcd.uscourts.gov
AP-ES-11-01-02 1459EST
A federal judge on Friday approved most of the provisions of an antitrust settlement between Microsoft Corp. (MSFT) and the Justice Department, effectively siding with the software giant and dealing a blow to nine states who were saying that the sanctions were too light.
The sanctions are to last for at least five years unless extended by the court, the judge said.
The approved settlement requires Microsoft to disclose some sensitive technology to its rivals months earlier than the company and the Justice Department had proposed.
"The court is satisfied that the parties have reached a settlement which comports with the public interest," U.S. District Judge Colleen Kollar-Kotelly wrote.
There was no immediate word on whether the nine states, which had rejected the settlement of the over four-year-old case as ineffective, would appeal Kollar-Kotelly's decision.
Shares of Microsoft, which had been down ahead of word of the ruling, rose $1.74 to $54.74 in after-hours trading. Microsoft said it was reviewing the decision.
"The issues in this case are significant, not only for Microsoft but for the industry and consumers," spokesman Vivek Varma said. "We are committed to resolving these issues in a constructive way so that we can focus on long-term growth and innovation for consumers."
The judge said the proposed settlement by Microsoft and the Justice Department "adopts a clear and consistent philosophy such that the provisions form a tightly woven fabric."
The decision eliminates the establishment of a technical committee to assess Microsoft's compliance with the agreement. In its place, a corporate compliance committee -- consisting of Microsoft board members -- will make sure Microsoft lives up to the deal, the judge said.
An appeals court ruling in June 2001 upheld trial court findings that Microsoft had illegally maintained its Windows operating system monopoly, but rejected breaking the company in two. The case was then transferred to Kollar-Kotelly to determine the appropriate remedies in the case.
Microsoft reached the settlement with the Justice Department and nine states in November 2001 after Kollar-Kotelly urged the parties to reach an agreement.
Kollar-Kotelly heard final oral arguments on the remedies in June.
Appeals are likely in a complicated case that has already lasted four years.
"It might not be resolved for another two years," University of Baltimore law professor Robert Lande said. "No one should count their winnings yet."
The settlement crafted by Microsoft and the U.S. Justice Department in November of 2001 gives computer makers greater freedom to feature rival software on their machines by allowing them to hide some Microsoft icons on the Windows desktop.
Microsoft is prohibited from retaliating under the settlement against those who choose non-Microsoft products. Nor could it enter into agreements that require the exclusive support of some Microsoft software.
Under the settlement, Windows will be sold under a standard license to the major computer makers, although discounts would still be allowed according to the volume of the order.
Justice prosecutors and Microsoft say the deal will immediately benefit consumers. Microsoft has already started complying with the deal by distributing technical data and releasing an update to Windows XP that permits the removal of Microsoft icons.
Some Microsoft competitors, such as Sun Microsystems (SUNW), have told the Justice Department that Microsoft's compliance measures aren't adequate. Lawyers for the government and the settling states are investigating those complaints.
The nine states that declined to settle were California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West Virginia, plus the District of Columbia.
These non-settling states had asked for greater disclosure of Microsoft's code to allow rival software to work better with Windows.
They had also sought a version of the operating system with removable add-on features to create a better niche for competing versions of things like Internet browsers and media players.
A federal judge handed Microsoft Corp. an enormous victory by endorsing nearly all of its antitrust settlement with the Justice Department and rejecting harsher penalties sought by nine states.
U.S. District Judge Colleen Kollar-Kotelly warned company founder Bill Gates and other Microsoft executives, however, that she would hold them individually responsible for complying with her instructions.
The nine dissenting states, joined by the District of Columbia, had argued that tougher sanctions were needed to restore competition in the computer industry. But the judge said penalties they sought would chiefly benefit the company's rivals.
Kollar-Kotelly made a few minor changes to the settlement that requires acceptance by Microsoft and the Justice Department, which sued the software giant 4 1/2 years ago when Democrats held the White House and economic times were rosier.
Appeals by the dissenting states were considered likely, although state officials said they were still studying their options. "We've got plenty of fight," Iowa Attorney General Tom Miller said. "We haven't lost it at all. We need to talk to our colleagues, analyze it more and make a decision."
The original trial judge in the case ordered the world's largest software company split in two, touching off two years of wrangling. Friday's result was far more favorable to Microsoft.
Gates said he was "personally committed" to abide by the agreement, which he called "a good compromise and good settlement." He said Microsoft was unlikely to challenge the decision.
"This settlement puts new responsibilities on Microsoft, and we accept them," Gates said, adding: "At this point, we're not seeing anything that would be cause for appeal, but we need to make a full assessment."
His corporate partner, chief executive Steve Ballmer, struck a conciliatory tone toward Microsoft's behavior toward rivals. He said the company has "learned and grown through the experience of the last four years. We are committed to moving forward as a responsible leader in an industry that is constantly, constantly changing."
Attorney General John Ashcroft called the decision "a major victory for consumers and businesses." Although the decision gives consumers more choices, Microsoft's competitors consider those choices meager.
One executive whose company's Web browser competes with Microsoft's dominant Internet Explorer said the ruling seals a toothless settlement. "There were no real remedies, no actual punishment. I'm not too surprised," said Jon F. Von Tetzchner of Opera Software. The ruling allows Microsoft rivals more flexibility to offer competing software features on computers running Windows.
Microsoft has already enacted terms of the settlement, and now allows users of its latest Windows versions to replace some built-in features, such as instant-messaging or music players, with those from competitors.
While rejecting the states' arguments, the judge acknowledged that Microsoft has a "frustrating" tendency not to admit to its illegal corporate conduct.
"Let it not be said of Microsoft that 'a prince never lacks legitimate reasons to break his promise,' for the court will exercise its full panoply of powers to ensure that the letter and spirit of the remedial decree is carried out," the judge wrote, quoting Renaissance philosopher Niccolo Machiavelli.
"The importance of this settlement is sending a message to the Microsoft board of directors that it will be held accountable at the highest levels of the corporation," said Connecticut Attorney General Richard Blumenthal.
Microsoft and the government had argued that the settlement they secretly crafted one year ago was sufficient. The agreement, which would last at least five years:
-Prevents Microsoft from participating in exclusive deals that could hurt competitors;
-Requires uniform contract terms for computer manufacturers;
-Allows manufacturers and customers to remove icons for some Microsoft features;
-Requires Microsoft to release some technical information so software developers can write programs for Windows that work as well as Microsoft's own products do.
Microsoft's extraordinary impact on everyday life is hard to understate: Its lucrative Windows and Office products are essential tools for businesses and government and an important foundation for the technology sector.
The company's market value of $287.6 billion exceeds the gross domestic product of at least 150 nations, including Saudi Arabia and Argentina. Its stock is among the most widely held by investors, especially among mutual funds and retirement accounts.
Microsoft Internet properties, including its Hotmail e-mail service, are among the world's most popular Web sites, drawing tens of millions of users each month. Increasingly, Microsoft has sought to push into new markets, such as videogame consoles, handheld and tablet computers and cellular phones.
Consider all of the budgetary difficulties some of these states are currently experiencing, and they're willing to gamble what they (the people) don't have against Microsoft? Who/what is Microsoft in their eyes? How do the people feel about it?