Judge to weigh Microsoft's wish for delay

A federal judge orders Microsoft and nine states to appear at a hearing next week to discuss a delay to the next phase of the landmark antitrust trial.

3 min read
WASHINGTON--A federal judge on Wednesday ordered Microsoft and nine states to appear at a hearing next week to discuss a delay to the next phase of the landmark antitrust trial.

On Dec. 21, Microsoft asked U.S. District Judge Colleen Kollar-Kotelly to extend by four months the date for holding a remedy hearing to decide what sanctions would be imposed for the company's antitrust violations.

On Monday, nine states and the District of Columbia filed a rebuttal brief charging that Microsoft had enough time to prepare for the hearing, which is scheduled for early March.

Kollar-Kotelly scheduled the hearing to discuss Microsoft's request for more time for Monday, Jan. 7.

The Justice Department and nine other states separately settled their portion of the case. That settlement is finishing a period of 60-day public comment and 30-day public response. Kollar-Kotelly could approve, reject or amend the deal as early as mid-February.

Illinois, Kentucky, Louisiana, Maryland, Michigan, New York, North Carolina, Ohio and Wisconsin joined the Justice Department's settlement. Nine other states--California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West Virginia--and the District of Columbia are pursuing the case.

In its request for delay, Microsoft argued that it would have to search 3.7 million documents to find the 118 requested by the litigating states. Microsoft also accused the nine states of trying to construct a new case, leading to a remedy hearing "that will be very different" from the one agreed to when the judge issued her scheduling order in September.

see special coverage: Microsoft, DOJ reach settlement In their response, the states argued that Microsoft's motion "is little more than a recycling of Microsoft's previously rejected arguments for delay."

U.S. District Judge Thomas Penfield Jackson ruled in April 2000 that Microsoft had violated two sections of the 1890 Sherman Antitrust Act. In June, seven appellate judges unanimously upheld eight separate violations attributed to Microsoft. The appeals court also threw out an earlier remedy that would have broken the company into separate operating-systems and software-applications companies.

The states argued in their brief concerning the delay request that Microsoft wants to continue operating without being sanctioned for its antitrust violations.

"It is no surprise that Microsoft would like to continue to delay the proceeding that most threatens to deprive it of the ability to engage in the practices condemned as unlawful by the Court of Appeals," the states' brief states.

For Microsoft, a full-court game
Microsoft said it was set to argue its point come next week.

"The court said we should all come in on Monday, and we will look forward to telling the court why amending the scheduling order is appropriate in light of the scope and magnitude of the non-settling states' discovery request," said Microsoft spokesman Jim Desler.

A representative for Iowa Attorney General Tom Miller, one of the leaders for the nine states, declined to comment, noting the matter was before the judge.

Legal experts looked skeptically at Microsoft's extension request and whether Kollar-Kotelly would push back the remedy hearing for as long as four months.

"A short continuance is a bit ho hum, but if it gets to be long it seems like they may be dragging their feet," said Emmett Stanton, an antitrust attorney with Fenwick & West in Palo Alto, Calif. "Four months sounds awfully long to me.

"But I wonder what might be going on behind the scenes that we don't know about," Stanton said. "Are they asking for four months, so that something else can play out--maybe private negotiations or the resolution of the private lawsuits?"

Certainly, Microsoft's legal calendar is full. A federal judge in Baltimore is expected to decide what to do about a settlement that would dispatch more than 100 private suits stemming from Microsoft's larger antitrust case. Plaintiff lawyers contend Microsoft overcharged consumers as much as $40 for every copy of Windows sold.

The settlement would have Microsoft give about $1 billion in software, services, training and monies over five years to about 12,500 disadvantaged schools. But critics, among them Apple Computer, have charged the giveaway would be anti-competitive.

At the same time, Kollar-Kotelly has to determine what to do in regard to the Justice Department settlement. This could include holding a hearing.

Microsoft is also awaiting a decision by the European Union's Competition Commission, which is investigating separate alleged antitrust violations. If the European Commission rules against Microsoft, the company could be fined about $2.5 billion, or 10 percent of its annual revenue.