Six states reject Microsoft settlement

At least six of the 18 states involved in the Microsoft antitrust case are refusing to sign the US Department of Justice's settlement agreement, saying it doesn't go far enough and they will seek a tougher, court-ordered remedy against the software giant.

In US District Judge Colleen Kollar-Kotelly's courtroom, the states' lead trial counsel, Brendan Sullivan, said the states were evenly split in thirds: one-third of the states are willing to sign on to the Justice Department settlement with Microsoft, a second group wants to proceed to litigation and the remaining third is undecided.

The states opposing the settlement weren't named. Only Massachusetts has publicly rejected the Government's settlement. But it is widely expected that California, which has the money and expertise to continue the case and is home to some of Microsoft's staunchest competitors, will take the lead in pursing the case.

This means despite the settlement agreement announced by the Justice Department, Microsoft will have to continue its court battle against the dissenting states in a series of remedy hearings scheduled to begin in March.

Once those hearings are concluded, it will be Kollar-Kotelly's job to impose a remedy against Microsoft, which was found to have violated US antitrust law by illegally maintaining its monopoly.

It is clear from the latest hearing that future settlement talks aimed at bringing this historic case to a close are unlikely to succeed.

Sullivan said an out-of-court agreement was still possible, "if Microsoft is open-minded on the issues, and the mediator believes some progress can be made".

But John Warden, lead trial counsel for Microsoft, said the vendor has given enough and more talks are pointless.

"The issues in this case have been beaten to death, and they have been beaten to death by people who are worn out," said Warden, in a booming voice. "Microsoft believes the settlement process has come to an end."

The settlement was widely attacked by industry groups that have supported the Government case, but defended by Justice Department officials. US Attorney General John Ashcroft earlier said the "proposed settlement puts in place enforcement measures that will require Microsoft to disclose internal operating system interfaces and protocols. Those disclosures in turn will create opportunities for independent software vendors to develop products that will be competitive with Microsoft's products."

The settlement is broadly designed to protect a range of applications that have the potential, as did Netscape Communications Web browser, to threaten Microsoft's operating system monopoly. Those products include browsers, media players, instant messaging applications and any future products.

As part of the agreement, Microsoft would be required to disclose its application programming interfaces.

The agreement also includes a number of protections for PC makers and requires Microsoft to license its operating system to PC makers on "uniform terms" for five years.

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