Some states waver on settling Microsoft antitrust accord

Associated Press

WASHINGTON — The coalition of 18 states that stood surprisingly firm during the years-long court fight against Microsoft Corp. threatened to fracture over whether to join in a negotiated settlement that critics said was inadequate.

The trial judge, U.S. District Judge Colleen Kollar-Kotelly, gave the states until this morning to decide whether to end the case under conditions already agreed upon by the Justice Department, or continue to fight Microsoft in court.

The situation was fluid late Monday, but some important states appeared to be leaning toward settling, according to people familiar with the secret discussions. These include Illinois and New York, two states that helped organize the courtroom battle and whose officials served on an executive committee of government antitrust enforcers for the case. Utah and North Carolina also appeared to be headed for settling.

But other states, including California and Massachusetts, indicated they would tell the judge they were ready to move forward with the case.

"Microsoft is one of the richest, most powerful companies anywhere, and there’s nothing wrong with that," Massachusetts Attorney General Thomas Reilly said Monday. "But you can’t use your power and dominance to crush the competition."

Legal experts said the states individually can accept the settlement, reject it or ask Microsoft to agree to tougher provisions. Even if some states decide to pursue the case in court, they also could seek to persuade Kollar-Kotelly that the agreement is flawed and ought to be rejected.

"We’re going to get some evidence whether any of the states have the will and the resources to take the case to closure," said Andrew Gavil, an antitrust expert at Howard University in Washington.

Over the weekend, the states heard from Microsoft competitors, trade associations and consumers groups about the complicated agreement announced Friday, according to sources close to the deliberations.

"They were asking questions about practical applications," one participant said.

The states of Massachusetts and California have publicly criticized the plan.

California Attorney General Bill Lockyer stepped back from his hard-line tone in recent days. On behalf of the states, Lockyer recently hired top Washington trial attorney Brendan Sullivan.

Lockyer spokeswoman Sandra Michioku said they haven’t made a decision yet.

In Illinois, Attorney General Jim Ryan said he is inclined to sign the agreement.

"I am pleased that the Microsoft case appears headed for resolution and that Illinois consumers will have gained a freer and more competitive marketplace as a result," Ryan said.

New York officials offered some changes to the agreement, but had not yet said whether they would accept the plan Monday evening.

Most states refused to comment until the Tuesday hearing, or said that they are still looking over the details of the 21-page deal.

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

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