Divisions emerged Monday among the state attorneys general in the Microsoft Corp. antitrust case, with some key states drawing closer to signing on to a settlement struck with the U.S. Justice Department, sources said.
At least two states who led the case against Microsoft--New York and Connecticut--were nearly ready to sign the Justice Department agreement, a source close to the states said.
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But the settlement issue was turning into a tug-of-war with some other key states such as Massachusetts, and possibly California, strongly opposed to the deal signed by Microsoft and the federal government that was unveiled Friday.
The pro-settlement and anti-settlement camps have both been working to win other states over to their point of view, sources said.
During the weekend, the states submitted a list of changes they want made to the settlement, according to another source.
The settlement reached with the Justice Department is designed to give computer makers freedom to feature other software and requires Microsoft to share the inner workings of its Windows computer operating system with other software makers. It also would create a technical committee to monitor enforcement.
The 18 states and District of Columbia have until Tuesday to determine whether they will back a settlement, under an order issued by the U.S. District Judge Colleen Kollar-Kotelly.
Kollar-Kotelly has scheduled a hearing for Tuesday at 9 a.m. for the state attorneys general to report back on whether they will sign the settlement.
Many of the remaining attorneys general said Monday that they were either still undecided or did not return phone calls. Illinois Attorney General Jim Ryan has said he is inclined the sign the settlement deal.
The state attorneys general have been Microsoft's harshest critics throughout the three-year case. Their opposition caused the collapse last year of a previous round of settlement talks.
The deal has already come under criticism from Microsoft rivals and some antitrust attorneys, who contend it is filled with loopholes and is too weak to thwart future anti-competitive tactics by the company.
Before it can go into effect, the pact must still go through a comment period and be endorsed by Kollar-Kotelly. If some of the states decide not to go along with the deal, they can continue to press on with their own, separate cases.
But many of the 18 states in the case may have lost their appetite to continue the legal battle without the federal government, especially in the face of war jitters and a sagging U.S. economy. And the more states that agree to settle with Microsoft, legal analysts said, the less likely the remaining states will be able to continue litigating.
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