Microsoft Antitrust Settlement Hearings Begin

Almost 4 years after the US government, 19 states, and the District of Columbia brought sweeping antitrust lawsuits against Microsoft, the company's biggest legal mess could wrap up soon. At settlement hearings, which began this morning in a federal courthouse in Washington, D.C., Microsoft, the US Department of Justice (DOJ), and the nine settling states will encourage Judge Colleen Kollar-Kotelly to fully accept the proposed settlement agreement that the parties reached last November. But several problems might prevent Microsoft from reaching a happy conclusion to its lawsuit woes, including the fact that the judge could simply throw out the settlement if she feels that it isn't in the public interest. Furthermore, the company faces a separate set of hearings next week, in which the nine remaining nonsettling states and the District of Columbia will seek more stringent remedies against Microsoft. This "separate track," as the judge calls it, should last several weeks.

Today's hearings are important for all the parties involved in any Microsoft antitrust case because today will be the first time Kollar-Kotelly addresses the proposed settlement, which she has been privately reviewing for almost 4 months. Legal experts will watch the judge closely, trying to discern whether her manner or word choices betray any hint of her opinion of the settlement, which has been roundly criticized by Microsoft competitors, industry groups, and most of the people who contacted the DOJ with their opinions.

Whatever the judge decides, her ruling promises to be controversial. Microsoft and the DOJ have warned the judge that she can either approve the settlement in its entirety or throw it out--in their opinion, any attempt to modify the agreement would be an illegal expansion of her judicial responsibilities. If Kollar-Kotelly decides that the settlement isn't in the public interest, and she rejects the agreement, Microsoft has said that it will appeal the case to the Supreme Court.

Kollar-Kotelly has already addressed the relevance of next week's states' remedy hearings and their relationship to this week's proposed settlement hearings. The judge said that none of the arguments for or against the proposed settlement can reference the nine nonsettling states and the District of Columbia and their proposed remedies, because that case is completely separate. However, critics of the proposed settlement point to the nine nonsettling states and their more drastic remedy proposals as proof that the DOJ and Microsoft proposal isn't in the public interest and therefore should be thrown out. Kollar-Kotelly can't rule that the proposed settlement is in the public interest, enter it into law, and then proceed with the states' remedy hearings. Imagine the legal uproar if the judge entered two separate and vastly divergent sets of remedies against the company.

The timing of Kollar-Kotelly's decisions could prevent this mess. The judge probably won't issue a ruling on the proposed settlement for a few weeks, which would give the states' remedy hearings time to proceed, unless, of course, the court grants Microsoft the extension it requested yesterday. The legal maneuvering continues ...

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