Microsoft settlement called ‘confusingly vague’

  • Wednesday, December 12, 2001 9:00pm
  • Business

Associated Press

WASHINGTON — Senate Judiciary Committee members said Wednesday that a proposed settlement of the Microsoft antitrust case will not encourage competition in the software industry and may be unenforceable.

Sen. Patrick Leahy, D-Vt., the panel’s chairman, said at a hearing that he was troubled by the sometimes "confusingly vague" language of the settlement.

He and others, such as Sens. Orrin Hatch, R-Utah, and Mike DeWine, R-Ohio, also questioned whether the settlement would end what federal courts have called Microsoft’s abuse of its Windows operating system monopoly that stifled competitors and harmed consumers.

"The serious questions that have been raised about the scope, enforceability and effectiveness of this proposed settlement leave me concerned that, if approved in its current form, it may simply be an invitation for the next chapter of litigation," Leahy said.

Hatch read from a letter in which former Netscape CEO James L. Barksdale claimed that if the proposed settlement had existed in 1994, the Web browser pioneer "would have never been able to obtain the necessary venture capital financing."

"The company would not have come into being in the first place," he said. If the settlement goes into effect, he said, "it will subject an entire industry to dominance by an unconstrained monopolist, thus snuffing out competition, consumer choice and innovation in perhaps our nation’s most important industry."

Netscape is now part of AOL Time Warner Inc., a Microsoft rival, and Barksdale sits on the AOL board.

Charles A. James, the Justice Department’s antitrust chief, defended the settlement.

James testified that it benefited all parties involved, including consumers, and that "we think that the terms of the decree are certainly enforceable."

Sen. Mitch McConnell, R-Ky., was the only committee member present who defended the settlement, citing a poll in which a majority of Americans said they approved.

Eight states and the Justice Department agreed last month to the settlement, Under its terms, Microsoft must let computer makers remove some features of Windows and must supply technical data to companies making competing software. A panel of three independent computer experts would be stationed at Microsoft headquarters for five years to ensure compliance.

"It is readily apparent (both from the terms of their proposal and from their comments to the press) that the non-settling states seek to punish Microsoft and to advance the commercial interests of powerful corporate constituents — Microsoft competitors such as Sun Microsystems, Oracle, Apple and Palm," Microsoft said.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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