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States, DOJ meet about Microsoft

A meeting where state attorneys general and the Justice Department discussed possible strategies for legal action against Microsoft is hailed as a success by one participant.

SAN FRANCISCO--Several state officials appeared interested in joining forces to pursue possible legal action against Microsoft at the close of a two-day meeting attended by the Justice Department here yesterday, according to a participant.

The source, who described the meeting as a success, declined to discuss the substance of the session, other than to say it was dominated by "procedural issues." While some 18 to 20 representatives from an estimated ten states attended the gathering, eight "appeared to be actively interested in joining forces," the source added.

"It struck me as being very much a prologue to a lot of cooperation and to what could be a very broad inquiry into Microsoft's practices," said the source, who spoke on the condition of anonymity.

On Monday, state attorney general representatives met for about four hours, the source said. Justice Department officials were present at yesterday's session, which lasted more than eight hours. A follow-up meeting will be determined through a series of conference calls, according to the meeting participant.

The source declined to say which states were in attendance, but representatives from California, Connecticut, Illinois, Massachusetts, New York, South Carolina, Texas, and Wisconsin have all confirmed they have subpoenaed Microsoft for documents regarding potentially anticompetitive practices. Florida, Iowa, and Minnesota are believed to have sent identical subpoenas, but officials from those states will not comment.

Representatives from the 11 states, as well as the Justice Department, have declined to publicly confirm whether this week's meeting took place. Plans for the gathering were reported first by CNET's NEWS.COM last week.

A Microsoft spokesman said that the company is cooperating with the various investigations and reiterated that it is not engaged in any wrongdoing. "We're confident that once they've reviewed the situation, they'll see that Microsoft is violating no laws," said Microsoft's Jim Cullinan, who added that software prices continue to fall while it continues to improve.

The meeting comes as Microsoft faces antitrust challenges on an increasing number of fronts. In addition to the Justice Department's high-profile enforcement action alleging that Windows 95 licensing requirements violate terms of a 1995 antitrust settlement, the agency is investigating a broad assortment of Microsoft business practices, including deals it has struck with Internet service providers, content providers, and streaming software firms.

Competition enforcers from Japan and Europe also have engaged in inquiries into the Redmond, Washington, company, and a private suit by Caldera--which acquired the rights to DR-DOS--has alleged in a private suit that Microsoft quashed the once-competitor to MS-DOS by using anticompetitive measures. The Senate Judiciary Committee is also holding a series of hearings on competition in the computer industry, and so far Microsoft has been a major focus.

One participant at this week's meeting characterized the gathering earlier as an exploratory session at which parties would "try to see if there is common ground among the states and the DOJ in order to move forward" on a joint investigation or suit against Microsoft. Legal experts have cautioned, however, that the existence of a meeting does not necessarily mean such joint actions are a done deal.

Still, the states' limited experience in handling litigation involving high technology and antitrust issues are forcing them to consider pooling their resources with the federal government, which has been investigating Microsoft for the better part of eight years now. States' interest in working with one another and with federal authorities is tempered by their individual differences about the best way to proceed in any case.