- The Washington Times - Saturday, November 3, 2001

The Justice Department and Microsoft Corp. yesterday asked a federal judge to approve a settlement that would end years of litigation against one of the nation's leading technology companies.

State attorneys general still are debating whether to endorse the settlement and could seek more concessions from Microsoft in court for antitrust violations. The proposal can take effect without the states' approval.

U.S. Attorney General John Ashcroft and Microsoft co-founder Bill Gates defended the proposal to end the litigation,which began under the Clinton administration when the Justice Department and 20 state attorneys general filed suit against the company in May 1998.

"This settlement is the right result for consumers and for business, the right result for the economy and the right result for government," Mr. Ashcroft said after the Justice Department asked U.S. District Judge Colleen Kollar-Kotelly to approve the deal.

The agreement places a range of restrictions on the Redmond, Wash., software developer. The company must provide rivals with information to let them make software compatible with Microsoft's Windows operating system.

The settlement also is intended to give computer makers more latitude to place software from Microsoft competitors like e-mail programs, instant-messaging software or media players on computers without facing reprisals from the computer giant.

The penalties Microsoft agreed to were less harsh than the breakup advocated by the states and ordered by U.S. District Judge Thomas Penfield Jackson. Still, Mr. Gates said the proposed restrictions on his company's behavior go farther than he wanted.

But Mr. Gates stressed in a conference call from corporate headquarters yesterday that settling with the Justice Department was the right thing to do and that the three-year antitrust case has changed him and the company he helped start in 1975.

"We will focus more on how our actions affect other companies," he said.

Judge Kollar-Kotelly agreed to review the settlement proposal and gave the state attorneys general until Tuesday to decide whether to accept it.

Iowa Attorney General Tom Miller said negotiations and mediation ordered by the court have been helpful, but the 18 states that remain embroiled in the antitrust suit against Microsoft have not decided to join in the settlement.

California Attorney General Bill Lockyer said in a statement he won't agree to the settlement until he fully understands what is in the document.

The states can pursue more concessions from Microsoft independent of the federal government's settlement. Brendan Sullivan, a trial lawyer hired by the states last week, said the attorneys general want to review the deal to ensure it is enforceable.

Charles A. James, head of the Justice Department's antitrust division, said he is hoping for broad support from the states.

"It's my hope that many of them will join with us because it's very clear that this relief is in the public interest," he said.

Mr. Ashcroft dismissed criticism from technology industry groups and consumer groups that the federal government's settlement is too lenient and amounts to a "sellout."

Justice Department officials said the court must either accept or reject the agreement based on whether the proposal is in the public interest. The court can't change the agreement, said Philip Beck, a private lawyer hired as a consultant by the Justice Department.

Terms of the agreement would remain in place at least five years, and the federal government could extend the provisions two years if Microsoft violates the settlement.

A three-member technical committee funded by Microsoft will ensure the company abides by the agreement.

The settlement wouldn't affect personal computers already shipped with Microsoft's new operating system, XP.

The antitrust lawsuit against Microsoft stems from charges that the company violated a 1995 agreement with the Justice Department to settle a previous case.

Microsoft is being investigated by the European Union over whether the company has a monopoly on the market there for servers, large computers that run computer networks.

Microsoft shares fell 44 cents yesterday on the Nasdaq Stock Market, closing at $61.40.


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