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Microsoft antitrust case still has bounce

It's volleyed to a federal appeals court, which will decide if a settlement between the software company, the Justice Department and some states was consistent with public interest.

WASHINGTON--Microsoft's antitrust woes are not over yet.

As expected, a federal appeals court said it will consider whether a settlement inked between Microsoft, the U.S. Department of Justice and some state attorneys general was consistent with the public interest. The judges are required by law to hear appeals from the lower court.

In November, U.S. District Judge Colleen Kollar-Kotelly approved a consent decree in the long-running antitrust case, which the Justice Department and the states filed in 1998. Kollar-Kotelly rejected stricter remedies proposed by some of the state attorneys general, saying the restrictions on Microsoft were so outlandish that they amounted to an "unjustified manipulation of the marketplace" designed to give competitors such as Sun Microsystems, Apple Computer and Red Hat an "artificial advantage."

Two states, Massachusetts and West Virginia, decided to appeal Kollar-Kotelly's decision.

A Microsoft representative on Thursday said, "This is a procedural matter. The parties have a right to appeal, and there is no question that the appeal would be heard.... Our focus right now is on full and complete compliance with the final judgments."

While the appeals court by law must hear appeals, the judges said--in an unusual move--that the full appeals court will sit "en banc" to hear the case, rather than assign it to a three-judge panel. The court's order was dated March 13.

The judges have not set a date for oral arguments in the case, but they're likely to be held by this summer.

Legal experts predict Massachusetts and West Virginia will have a difficult time before the appeals court, especially because Kollar-Kotelly spent 32 days last spring on hearings before crafting a remedy that would be appropriate.

In an separate case filed against Microsoft by archrival Sun Microsystems, attorneys for both companies will square off against each other before a federal appeals court in Richmond, Va., next Thursday.