States Threaten to Go After Microsoft on Their Own

After Microsoft's breakup reprieve last week, supporters of the software giant probably believed that the company had dodged a bullet. But at least four of the US states allied against Microsoft went public this weekend, assuring onlookers that the company will be appropriately punished for its actions. The attorneys general for New York, Connecticut, Iowa, and California assured the public that, although the US Department of Justice (DOJ) decided not to break up Microsoft, that decision doesn't mean that the company will only get a slap on the wrist. In some ways, the statements from these men did much to diffuse reports that Microsoft will be able to easily settle its antitrust case, a fairly obvious outcome after the DOJ admitted that it wouldn't seek a breakup.

"We look forward to continuing to work with the \[DOJ\] in the proceedings that are about to begin before the trial court, but will, if necessary to protect the public, press for remedies that go beyond those requested by the \[DOJ\]," said Eliot Spitzer, New York's attorney general, and Bill Lockyer, California's attorney general, in a joint statement issued late Friday. The states also announced that they will split with the DOJ and separately pursue Microsoft if the federal government agrees to remedies that don't go far enough to curb Microsoft's illegal activities. "Other steps can and should be considered," said Iowa's Tom Miller.

But the states also seem to be prodding the DOJ to accept only the strongest possible sanctions. Last week, when the DOJ announced that it wouldn't seek a breakup, the agency said that it would instead accept "an order that is modeled after the interim conduct-related provisions" that Judge Thomas Penfield Jackson handed down. The states say this action is not enough. "The interim conduct provisions are very much a starting point and not an end-all solution, at least for the states," Connecticut's Richard Blumenthal said this weekend.

The DOJ has also said that it won't prevent Microsoft from manufacturing or releasing Windows XP as planned, but the agency has reserved the right to apply any appropriate sanctions against the company to Windows XP at a later time. The states don't think this plan is enough and have said that Microsoft's latest OS will receive "close scrutiny" with regard to any upcoming court-ordered remedy.

"The states of New York and California will insist that Windows XP--Microsoft's latest version of its \[PC OS\], scheduled for marketplace release in the next few weeks--receives close scrutiny in arriving at a judicially ordered remedy," Spitzer and Lockyer said in their joint statement. "As the US Court of Appeals found, some of the ways that Microsoft unlawfully crushed competition from Netscape included bundling Microsoft's Internet browser to its Windows \[OS\] and pressuring industry computer makers into refraining from adding Netscape's browser to the computers that they sold. It is imperative that Microsoft not have another opportunity to use Windows XP to suppress competition in emerging Internet areas."

Microsoft's antitrust case will pick up again on Friday, when the company and the government are scheduled to submit a joint status report to Judge Colleen Kollar-Kotelly that will detail their requests for new evidence and hearings. The two sides are also expected to submit proposed trial schedules.

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