Massachusetts To File Appeal To Microsoft Settlement

Only Massachusetts said Friday it would continue to seek tougher sanctions against Microsoft after seven other states announced they would accept the landmark settlement reached by the company and the Bush administration.

Massachusetts Attorney General Tom Reilly, one of Microsoft's most outspoken critics, called the settlement, approved by a federal judge earlier this month, a "loophole-filled deal' without adequate sanctions.

"There was nothing in the deal with Justice that will change Microsoft's business practices in any substantial way,' said Reilly, a Democrat. "We are prepared to go it alone.'

West Virginia was the only other state to leave open the possibility of filing an appeal by Monday's deadline. The lawsuit against Microsoft at one point included 21 states.

Seven states--California, Connecticut, Florida, Iowa, Kansas, Minnesota and Utah--said Friday they would go along with the settlement, which they had once opposed as being inadequate.

These states plus the District of Columbia plan no additional court action and will focus on making sure Microsoft obeys the settlement, said Iowa Attorney General Tom Miller.

"Consumer interests are now best served by turning our focus to enforcement,' said Connecticut Attorney General Richard Blumenthal.

Miller also disclosed that Microsoft will pay $25 million in legal reimbursements to be divided among states based on how much they spent on the antitrust case. California has borne the brunt of legal costs.

The company was required under federal law to pay those legal fees, though $25 million is far more than the out-of-pocket costs for those states. Government lawyers are paid fixed salaries, but the law calculates reimbursed fees based on hourly rates for private attorneys.

California Attorney General Bill Lockyer said the settlement was "not completely satisfying.' But he said it "closed enforcement loopholes, keeps compliance with the remedies squarely before the court and allows us now to turn attention to making sure that Microsoft competes fairly in the marketplace.'

Under the settlement, Microsoft:

--May not participate in exclusive deals that could hurt competitors;

--Must offer uniform contract terms for computer manufacturers;

--Must let manufacturers and customers remove icons from desktops for some Microsoft features; and

--Must release some technical information to rival software developers.

Nine states agreed last year with the Justice Department to settle the case. Those states were New York, Ohio, Illinois, Kentucky, Louisiana, Maryland, Michigan, North Carolina and Wisconsin.

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