Microsoft seeks dismissal of case with holdouts

Microsoft Corp. has asked the U.S. District Court overseeing its antitrust case to dismiss the case brought by the nine states that have refused to settle while also warning that the tougher remedies sought by these states are so draconian that they would undermine its Windows operating system.

In court papers filed late yesterday, Microsoft said these nonsettling states don't have the legal standing under federal law to bring their own case.

The states "seek to establish themselves as national antitrust policymakers" in a case where they haven't shown any "state-specific injury," the company argued in part.

"Permitting the non-settling states to seek sweeping, nationwide relief under the federal antitrust laws É would raise serious constitutional questions," the company said.

Remedy hearings on the tougher sanctions sought by California, Connecticut, Florida, Kansas, Iowa, Massachusetts, Minnesota, Utah, West Virginia and the District of Columbia are scheduled to begin March 11.

Eighteen states were originally involved in the litigation, but nine of them and the District of Columbia said the proposed five-year settlement authored last fall by the U.S. Department of Justice didn't go far enough.

The states' remedies include creating a version of the Windows operating system stripped of any middleware applications.

"This would destroy Windows desktop operating systems as a stable and consistent development platform," said Microsoft.

The states' call for an open-source version of Internet Explorer would destroy "any incentive for Microsoft to invest in the creation of such new versions," Microsoft said.

A hearing on the proposed settlement is schedule March 6.

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