[iwar] [fc:Microsoft.settlement.hits.dead.end]

From: Fred Cohen (fc@all.net)
Date: 2001-11-06 19:47:12

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From: Fred Cohen <fc@all.net>
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Date: Tue, 6 Nov 2001 19:47:12 -0800 (PST)
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Subject: [iwar] [fc:Microsoft.settlement.hits.dead.end]
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Tuesday, 6 November, 2001, 16:56 GMT
Microsoft settlement hits dead end

Judge Colleen Kollar-Kotelly offered Microsoft more time

Microsoft has given up its fight to uphold an antitrust settlement agreed
with the US government after six US states rejected the deal.

"Microsoft believes the settlement process has come to an end, or will come
to an end [later today]," the software giant's layer John Warden said.

Microsoft rejected an invite from the judge in the case to push ahead with
further negotiations following the six states' rejection earlier on Tuesday.

At the time, a further six states out of 18 involved in the case remained
undecided, while the remaining six were ready to settle.

Remedy hearings 

The judge is now expected to dismiss the federal settlement agreement and
start remedy hearings to decide on penalties against Microsoft.

"If the case is not settled, Judge Kollar-Kotelly has laid out an aggressive
timeline for new remedy hearings in line with her belief that a quick
resolution to the case is in the best interest of the nation," said BBC News
Online's Kevin Anderson in Washington.

These remedy hearings would start in March 2002 and could go on for a very
long time. 

"Despite the judge's wish for a quick resolution, legal experts believe that
the remedy process could be long and drawn out," Mr Anderson said.

This would be seen as bad news for Microsoft, especially as analysts viewed
the settlement as a positive development for the company.

They said the removal of any uncertainty over the issue would benefit the
software company. 

Return to court? 

Microsoft's deal with the federal government was reached under a fast-track
process set up by new trial judge Colleen Kollar-Kotelly.

The software giant was loath to accept any alterations to the consent decree
it had negotiated with the Department of Justice.

Late-night negotiations between representatives of the 18 state
attorneys-general and Microsoft through a court-appointed mediator failed to
produce substantive changes.

Slap on the wrist? 

Several states, led by California, Massachusetts and Connecticut, have said
that the government has been too soft on Microsoft.

Thomas Reilly: 'The deal is full of loopholes'

The federal deal would have allowed Microsoft to proceed with its
anti-competitive activities largely unchecked, several states had argued.

In the outcome of a three-and-a-half year court case, the company was found
guilty of abusing its dominant position in the software market.

However, the original punishment - splitting the company into two - was set
aside after Microsoft appealed.

In an earlier interview with the Wall Street Journal, Massachusetts
attorney-general Tom Reilly said the deal was "full of loopholes and does
little more than license Microsoft to crush its competition".

"This was thrust on the states at the last minute," he added, "under
enormous pressure, without enough time to review the details".

Loopholes 

Brendan Sullivan, the lawyer representing the states, did not say which ones
had objected to the deal.

Sources said they would include Wisconsin, Iowa, Kansas, Maryland, Florida,
West Virginia and Washington DC.

As the settlement deal stood ahead of the rejection, it would have required
Microsoft to reveal technical information to competitors.

The company would also have been banned from forming exclusive agreements
for its products. 

But critics have argued that the wording of the deal would have given the
company a number of get-out clauses if it had wanted to stop competitors
from gaining any real advantage.

Satisfied 

Nevertheless, some states had welcomed the deal.

Illinois Attorney General Jim Ryan said on Friday he was "pleased" and was
"inclined to sign on to the settlement agreement because the terms appear to
achieve the overall objectives of our lawsuit".

Others thought likely to be among those that had been prepared to sign up
include New York, Ohio, North Carolina and Utah.

Kentucky, Michigan, Louisiana and Minnesota are among those believed to have
been undecided. 

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