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State says Microsoft getting off easy

The Massachusetts attorney general's office argues that tougher penalties are necessary to prevent Microsoft from engaging in anticompetitive behavior.

The Massachusetts attorney general's office said Wednesday that tougher penalties are necessary to prevent Microsoft from engaging in anticompetitive behavior.

Massachusetts, the only state still pursuing antitrust charges against the software maker, said in a court filing that a set of penalties that a federal judge imposed last year are insufficient. "The failures of the district court's remedy are profound," the state said in a brief filed with the D.C. Circuit Court of Appeals. "It fails to stop Microsoft?s illegal conduct and does nothing to restore competition to the monopolized market or to prevent Microsoft from engaging in similar means to the same unlawful end."

Last November, U.S. District Court Judge Colleen Kollar-Kotelly rejected harsher antitrust punishments. Kollar-Kotelly said that after 32 days of remedy hearings, she realized the proposals Massachusetts and other states suggested would have been an "unjustified manipulation of the marketplace" designed to give competitors such as Sun Microsystems, Apple Computer and Red Hat an "artificial advantage."

By that time, the U.S. Justice Department had already agreed to settle its 1998 antitrust case against Microsoft. Most of the other states pursuing the company through the court system chose not to appeal. West Virginia dropped out last month, leaving Massachusetts as the only state scheduled to argue the case before the appeals court on Nov. 4.

In Wednesday's filing, Massachusetts did not spell out exactly what it wants the appeals court to do beyond overturning Kollar-Kotelly's order and sending the case back to her for additional proceedings. But the 43-page brief does suggest further disclosure of programming interfaces, additional requirements for server-to-server interoperability, a requirement that Microsoft distribute Java, and making the Internet Explorer browser open source.

Massachusetts told the court: "Market forces have neither eroded the monopoly that Microsoft unlawfully maintained nor undercut the competitive advantages it improperly gained. Yet the district court's remedy fails to stop all of the behavior this (appeals) court found illegal, does nothing to restore the competitive threat that Microsoft unlawfully thwarted, and does not deprive Microsoft of the marketplace benefits achieved through its misdeeds."

A Microsoft spokesman defended the settlement and said the company opposes Massachusetts' efforts to reopen the consent decree. "These are additional sanctions that were thoroughly reviewed by the district court and determined not to be appropriate," he said.

Microsoft is operating under the settlement approved by Kollar-Kotelly. Among other requirements, it created an antitrust compliance committee comprised of Microsoft board members.