It's Official: Some States Ask for Microsoft Oversight Extension

Six US states and the District of Columbia (DC) on Tuesday asked a federal judge to extend the government's oversight of the Microsoft antitrust settlement through 2012. That oversight is set to expire in November, but the states feel that Microsoft's continued dominance with Windows and Internet Explorer (IE) could curb innovation in the coming generation of Web-based services.

"Microsoft continues to have a stranglehold on two products that almost all consumers use for accessing these Web services and applications," a lawyer for the state of California told US District Judge Colleen Kollar-Kotelly. The lawyer argued that the oversight period of Microsoft's consent decree should be doubled, from five years to ten. The consent decree was originally instated back in 2002.

When Microsoft settled its US antitrust case in 2002, it faced 17 US states, DC, and the US Department of Justice (DOJ). The six states that would like to see the consent decree extended include California, Connecticut, Iowa, Kansas, Minnesota, and Massachusetts (and DC). Two states that had previously supported the extension, Florida and Utah, bowed out in the past two weeks.

While Microsoft does indeed still dominate the markets in question, competition has actually caught up with the software giant in small but meaningful ways in the past five years. Windows controlled 92 percent of the operating system market in 2006, down from 97 percent in 2002. And while IE still enjoys 85 percent usage share, in 2002 IE controlled 95 percent of the market. IE's particularly obvious fall is the result of inroads by open source competitor Mozilla Firefox.

While Kollar-Kotelly said she would consider the request, she is unlikely to factor in usage and market share numbers. The judge said previously that the point of the consent decree was to curb Microsoft's anti-competitive practices. Certainly, the Microsoft of today is far less manipulative and abusive than the company of a decade ago. The several remaining states argue that these behavioral changes are the result of the consent decree and that "the principal constraint on Microsoft's ability to abuse its market power will be gone" if the consent decree expires in November as planned.

"We're a bit surprised that a few states are now requesting an extension," a Microsoft spokesperson said, correctly adding that these very states argued last month that the consent decree was "ineffective." A final hearing on Microsoft's compliance with the consent decree is set for November 6.

Meanwhile, Microsoft faces another major antitrust hurdle in the days ahead. Next Monday, the European Union (EU) Court of First Instance will issue its ruling on Microsoft's appeal of a 2004 antitrust ruling there. The ruling will be made public at 9:30 am local time in Luxembourg, where the court is located.

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