States seek extension of Microsoft decree
Six states on Tuesday requested a five-year extension of an antitrust decree imposed on Microsoft Corp., contending that continued judicial supervision was needed to prevent the software company from crushing challenges to its Windows operating system monopoly.
The group, led by California, told a federal judge that it would formally ask her to extend most provisions of the 2002 decree that are set to expire Nov. 12.
The decree was negotiated in 2001 after an appeals court ruled Microsoft had illegally protected its monopoly for Windows, which powers more than 90% of the world’s personal computers.
The states argued in a court filing last month that the settlement had failed to bring competition to the marketplace. They said Tuesday that once it expired, Microsoft would be free to bar competition from Internet-based software that might threaten Windows and the company’s dominant Internet Explorer Web browser.
“Microsoft continues to have a stranglehold on the two products, Windows and IE, that almost all consumers use for accessing these Web services and applications,” Stephen D. Houck, a lawyer for the states, told U.S. District Judge Colleen Kollar-Kotelly in Washington.
An extension would “make sure” Microsoft can’t “abuse its still considerable market power to undermine” what it “considers emerging technologies” that threaten the monopoly, Houck said.
Microsoft spokesman Jack Evans said it was “a bit surprising” that the same states that complained last month the decree was ineffective were now asking for its extension. He said it was premature for Microsoft to comment further because the company needed time to review a proposal it learned only about last week.
Kollar-Kotelly’s only direct comment on the proposal was to say “if there is going to be a request” for continuing court supervision “it would have to be for an identifiable purpose.”
She gave the states until Oct. 15 to file a formal request.
The judge noted the “narrow focus” of the appeals court finding that Microsoft broke antitrust law. That decision “did not offer a basis for extinguishing Microsoft’s monopoly or reducing its market share,” she said.
Kollar-Kotelly said that when she approved the decree in 2002, changes in the software industry weren’t “predictable” and the ability to make such forecasts hadn’t increased since. “The final chapter of the final judgment has not been written,” she said.
Houck said the six states, plus the District of Columbia, wanted the court to extend provisions that prevent Microsoft from punishing computer makers and Internet services for promoting software that competes with Microsoft products.
The states won’t seek extension of a provision that requires Microsoft to charge the 20 largest computer makers a uniform price, subject to a volume discount. Houck said a survey of computer makers conducted by the states showed that these companies weren’t eager to extend that provision.
A provision mandating the licensing of so-called communications protocols has already been extended until November 2009. Microsoft agreed to that last year after antitrust enforcers complained that the company was slow to provide technical information that lets rival servers communicate with Windows.
Houck said the six states would exercise their option under the agreement to seek a three-year extension of that disclosure provision until 2012.
Besides California, the states requesting extension of the decree are Connecticut, Iowa, Kansas, Massachusetts and Minnesota.
