Microsoft Fires Back At Dissenting States, Oracle

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On Friday, Microsoft filed a 140-page court document disputing nearly all of the dissenting states' claims and asserted that the District of Columbia and the nine states contesting the proposed settlement between the company and U.S. Department of Justice have strayed far afield of the U.S. Court of Appeals' findings.

Microsoft argued that the 412 antitrust findings by the U.S. Court of Appeals overturned charges of product tying and the company's alleged attempt to monopolize the Web-browsing market and should not be part of the sanctions.

"Microsoft objects to Plaintiff Litigating States' incorporation of a number of the District Court's findings of fact," a Microsoft spokesman said. "The Court of Appeals reversed the determination of liability under Section 2 for attempted monopolization of Web browsing software and vacated the determination of liability under Section 1 for tying Internet Explorer to Windows 98."

The document was filed following a Jan. 9 order by U.S. District Judge Colleen Kollar-Kotelly for both parties to submit statements on the issues in dispute. A hearing is scheduled on the proposed remedies on March 11. Microsoft Chairman and Chief Software Architect Bill Gates may testify at the hearing next month, according to published reports.

The dissenting states, which maintain that stricter remedies are needed to prevent Microsoft from gaining a potential monopoly in the Web-services market, include California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West Virginia as well as the District of Columbia. These states contend that the Court of Appeals did not vacate or set aside the District Court's underlying findings of fact of June 2000, and they may legitimately be considered in fashioning the remedy.

On Friday, Microsoft also filed a motion to compel rival Oracle to produce documents revealing its alleged cooperation with the non-settling states. Microsoft claims that Oracle has not yet complied with document and deposition subpoenas requested in mid-December.

"Oracle is one of Microsoft's most vocal critics and hostile competitors. Thus, it perhaps is not surprising that Oracle worked closely with the non-settling States, helping them to conceive of and prepare their draconian remedial proposals--and that Oracle also flouted the document and deposition subpoenas Microsoft served on it in this proceeding," according to a Microsoft statement issued late last week. "Oracle has ignored this Court's admonition that third parties cannot cooperate with the non-settling States and at the same time stonewall Microsoft on discovery."

Microsoft contends that the few documents served up by the non-settling states, Oracle and third parties demonstrate that Oracle Vice President Ken Glueck was one of the "prime movers" behind the non-settling states' remedial proposals. Since Microsoft's filing in December, Oracle said the dissenting states would not be calling its chief corporate architect, Edward Screven, as a witness.

According to Reuters, Microsoft named Gates, CEO Steve Ballmer and 10 other company executives as potential witnesses for the hearings on sanctions, scheduled to start March 11. Gates and the other executives are expected to argue that Kollar-Kotelly ought not impose any sanctions beyond those that the company agreed to in November in a settlement deal with the DOJ and nine of the state attorneys general in the case.