- The Washington Times - Thursday, March 7, 2002

The Justice Department and Microsoft Corp. tried to convince the judge overseeing their lengthy antitrust case that the settlement the two sides reached last year will encourage competition and place meaningful restrictions on the software giant.
Philip Beck, a lawyer representing the government, said the proposed settlement accomplishes more than the Justice Department would have been able to achieve by pursuing tougher sanctions in court.
The Court of Appeals made it difficult for the government to obtain more penalties against the Redmond, Wash., computer company than those outlined in the settlement because it limited the scope of the nearly four-year long antitrust case, Mr. Beck said.
The U.S. Court of Appeals for the District of Columbia found Microsoft guilty in June of acting illegally to maintain its monopoly in the market for operating systems. But it would have been difficult to prove Microsoft has leveraged its operating system monopoly to get an advantage in other markets, Mr. Beck said.
"We believe the Department of Justice and the settling states have negotiated an excellent decree," Mr. Beck said.
The terms of the settlement require Microsoft to let computer makers promote software from rivals without fear of retaliation; to disclose the code that its rivals need to run software on its Windows operating system; and to disclose some of its software blueprints so rival software developers can make compatible products for Windows, used in 95 percent of the world's personal computers.
The federal government and nine states have endorsed the proposal negotiated by the Bush administration. But eight other states and the District are pushing for tougher penalties and will present their arguments in a hearing scheduled to begin Monday.
Microsoft has asked for a two-week delay in that hearing.
Microsoft attorney John Warden said the proposed settlement goes further and is more punitive than Microsoft thought necessary, but he said the company agreed to its terms because "they were the price of settlement."
"Litigation is not good for the soul of an individual or a company," he said. "It was time to get this over with."
But Microsoft opponents argued yesterday the proposed settlement fails to do enough to help the company's rivals or prevent Microsoft from carving out a monopoly in other markets, from software for wireless phones to mobile computing devices.
U.S. District Judge Colleen Kollar-Kotelly gave a group of supporters and opponents 10 minutes each to offer their viewpoints.
Robert Bork, speaking on behalf of the Project to Promote Competition, which opposes the settlement, said that even if the document had been in place in 1995, it would not have prevented Microsoft from its "predatory campaign" against Netscape, whose Internet browser competed for market share with Microsoft's and was its main rival.
"Not only does this decree not fix the problem, it lets Microsoft run wild," said Mr. Bork, a former federal appeals court judge.
Representatives of SBC Communications Inc., the American Antitrust Institute, the Computer and Communications Industry Association, and the Software and Information Industry Association also criticized the deal.
SBC attorney Donald Flexner said Microsoft can use its dominant share in the market for operating systems to gain leverage in other markets and threaten other companies.
"We seek no protection from competition," he said. "We seek protection from Microsoft putting its power between us and the business we want to be in."
Mr. Warden dismissed the complaints of Microsoft opponents as "whines" and said rivals simply are lobbying the court for changes to the proposal that would provide them with "personal advantage."
For her part, Judge Kollar-Kotelly asked multiple questions on a range of issues throughout the hearing from Microsoft's lobbying activities on behalf of the settlement to its view of the court's role in approving the proposed settlement.
She can reject the settlement. Yesterday's hearing was mandated by the Tunney Act of 1974, intended to ensure that government settlements are in the public interest.
The judge, who demanded that Microsoft and the Justice Department reach a settlement, indicated she would not make a decision quickly.
"I have a lot of work ahead of me before I make this decision," she said.
Mr. Beck urged her not to delay a decision on the proposed settlement until the group of states seeking tougher sanctions complete their hearing. That could last two months.


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