Lawyers for States Suing Microsoft Accuse Company of Arrogance in Case

"Somehow they know better than anybody else what is good for the PC ecosystem," lawyer Steven Kuney said, referring specifically to earlier testimony by Microsoft chairman Bill Gates. "And what is good for Microsoft is good for the economy, consumers and everybody else."

Kuney urged the judge to approve penalties proposed by the states, which are far more sweeping than those the company agreed to in a settlement with the federal government last year.

To comply with the judge's instructions, Kuney prioritized the states' proposals, saying that making sure Microsoft discloses enough technical information to software developers is most important to the health of the technology industry.

That information would make sure that competing software works with Microsoft's dominant Windows operating system as well as Microsoft's own products. Microsoft has been criticized for holding back such information.

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Kuney alsosays it would bring more flexibility and protection for computer makers from restrictive contracts and retaliation by Microsoft. Several executives, including those from Gateway, complained about Microsoft threats.

"The records of threats...is stunning," Kuney says, calling threats "part of the fabric of how they do business."

Kuney says the federal settlement stops Microsoft from some forms of retaliation, but does nothing to keep the company from threatening competitors and partners.

Brendan Sullivan, another lawyer for the states, was due to deliver the rest of the states' arguments later Wednesday. Two lawyers on behalf of Microsoft--Dan Webb and John Warden--planned to give their arguments Wednesday afternoon.

U.S. District Judge Colleen Kollar-Kotelly told both sides to focus their arguments on modifying competing penalty proposals rather than their differences.

During the hearings, lawyers for the states at times posed hypothetical questions based on changes in their proposed penalties. Kollar-Kotelly indicated in her order that she may want the states to make those changes, and Kuney said the states would be willing to make some modifications.

Microsoft may have a harder job. She asked the company to consider portions of the states' proposals that "would prove least onerous to [Microsoft, yet remain effective as a remedy."

She also wants Microsoft to consider how the company could close loopholes in the federal settlement, a central criticism of the deal.

Any changes Microsoft makes would have to be agreed to by the Justice Department. The settlement has yet to be approved.

On Tuesday, Microsoft announced it will drop support for Sun Microsystems' flagship Java product by 2004. Microsoft cited Sun's opposition in the antitrust case, as well as Sun's private suits against Microsoft.

"The decision to remove Microsoft's Java implementation was made because of Sun's strategy of using the legal system to compete with Microsoft," Microsoft spokesman Jim Cullinan said in a statement.

Current versions of Windows XP do not include Java, though users can download it if they need to run programs written in the language. But Microsoft did say it would temporarily restore support for Java in the upcoming update to Windows XP, expected this fall.

Sun offered little praise for Microsoft's decision to carry Java for the time being, focusing on the 2004 deadline and Microsoft's decision to use its own incompatible version.

In a statement, Sun called the decision "a move calculated to coerce consumers and developers who prefer the Java platform to nonetheless abandon that platform simply because Microsoft has publicized its intentions to deny the Java platform's access to Microsoft's monopoly distribution channels."

Cullinan said the company will temporarily support Java "to minimize any potential disruption among our customers."

The battle over Microsoft's implementation of Java--promoted for its ability to run programs regardless of what operating system it is installed on--was a central part of the federal antitrust case as well as two civil suits brought by Sun against Microsoft. Microsoft was criticized for "polluting" the standard by equipping Windows with its own flavor of Java, which was incompatible with Sun's version.

States that rejected the government's settlement with Microsoft last fall and are pressing for tougher penalties are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, along with the District of Columbia.

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