Unnamed Firms Push for Overturn of Microsoft Antitrust Settlement

SAN FRANCISCO —  Hoping to persuade a federal judge to overturn a controversial antitrust settlement, a powerful Silicon Valley law firm representing unnamed companies filed court papers Tuesday alleging that Microsoft Corp. is already violating at least the spirit of the agreement.

Microsoft signed a consent decree last July following a lengthy government investigation, first by the Federal Trade Commission and later by the Justice Department. The software company agreed to change the way it licensed operating system software, which controls basic computer functions, and to alter a few other business procedures.

Many in the industry denounced the consent decree, saying it would do little to stop anti-competitive practices or prevent Microsoft from gaining unhealthy control over the industry.

But the decree has not yet been approved by a federal court judge, normally a pro forma procedure. In November, U.S. District Judge Stanley Sporkin extended the 60-day period for public comments on agreement and scheduled a Jan. 20 hearing to review objections.

On Tuesday, the Palo Alto law firm, Wilson, Sonsini, Goodrich & Rosati, acting on behalf of unnamed companies, filed a 96-page document with an appendix twice as long asking Sporkin to reconsider the decree. The brief cites Microsoft’s continued ability to leverage its position as the dominant supplier of PC operating systems.

“When Microsoft signed the consent decree, the attorney general went on television and said that this agreement will provide the consumer with more operating systems choices,” said Gary Reback, a Wilson Sonsini partner. “Since then, one major player has dropped out of the market and Microsoft has doubled the prices.”

Reback’s clients wish to remain anonymous because they fear retribution from Microsoft, he said.