Judge to Hear Microsoft Sanctions Sought By States

In hearings expected to last eight weeks, Microsoft will portray the states' demands as excessive and try to confine remedies to specific antitrust violations found at trial.

The hearings promise to be a pivotal battle over whether the remedies in the case to be decided by U.S. District Judge Colleen Kollar-Kotelly should be narrowly focused or anticipate new areas where Microsoft can flex its monopoly power.

In a separate proceeding, the judge still is considering whether the settlement negotiated with the Justice Department in November, and agreed to by nine other states, is in the public interest.

In June, a federal appeals court threw out some of the charges against Microsoft, but upheld a lower court ruling that the company had illegally maintained its Windows software monopoly in PC operating systems.

The appellate judges agreed Microsoft tried to crush rival Netscape Communications after the company concluded Netscape's Navigator Internet browser was a threat to Windows' dominance.

When the government first brought its landmark antitrust case against Microsoft nearly four years ago, few computer users had ever heard of media players, instant messaging orinteractive television set-top boxes.

States Want Sufficient Remedy

These products will now be featured in court by the states that have refused to settle.

"The states are trying to say that the market keeps moving on, and if you don't address these new emerging technologies, the remedy is not going to be sufficient," says Andrew Gavil, a professor of antitrust law at Howard University.

The proposed settlement is designed to remedy the antitrust violations by giving computer makers more freedom to feature rival software on their products, among other things.

Microsoft will parade company executives, economists and legal experts to argue the sanctions can't go beyond those specific wrongdoings cited by the appeals court.

"The non-settling states are not entitled to broader relief designed to terminate what was found to be Microsoft's monopoly," the company said in its pretrial brief.

But attorneys representing the nine dissenting states--California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, West Virginia and the District of Columbia--will tell the judge that's not enough.

The states have exhorted the judge to "go beyond the specific, past statutory violations" found by the courts, arguing the case "has been a futile exercise if the government proves a violation but fails to secure a remedy adequate to address it."

The states will call witnesses from companies from related industries, from telecommunications giant SBC Communications and handheld computer maker Palm to interactive television software maker Liberate Technologies.

To ensure a competitive market for future software, the states are proposing that Microsoft sell a "modular" version of Windows that would allow computer makers to strip out add-on features like the Internet browser or the media player.

They also would force Microsoft to disclose more about its software and license its Internet Explorer browser to other companies royalty-free.

But Kollar-Kotelly has already expressed skepticism about the breadth of the states' argument, and has been receptive to Microsoft's contention that devices like hand held computers and media players should be excluded.

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