Microsoft Constitutional Challenge Unsettles Settling States

The nine US states that agreed to sign the proposed Microsoft settlement found themselves in a sticky situation this week after the company launched a controversial constitutional challenge to the nine nonsettling states and the District of Columbia. Microsoft's challenge--that, in effect, US states have no authority to inflict remedies that will affect the company on a national level because the federal government has already agreed to settle the case--affects all states, not just the nonsettling states. So even the settling states have objected to Microsoft's complaint, which seeks to have the nonsettling states' remedy proposals thrown out. "To assure no misapprehension, the settling states wish to state that they regard Microsoft's dismissal motion as without merit," the settling states explained in a legal brief filed late last week.

Microsoft's constitutional challenge is already on shaky ground; legal precedent dating back to the 1980s gives US states the explicit right to pursue national antitrust cases separately from the federal government. Representatives for the nonsettling states and the District of Columbia said Friday that they had expected Microsoft to make such a challenge but had expected it to come much earlier. Microsoft's filing last week amounts to a last-minute effort because the settlement hearings begin this week.

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