Massachusetts Attorney General Appeals Microsoft Decision

"The deal ignored Microsoft's ill gotten gains, did nothing about safeguarding competition in new technologies, and was filled with loopholes and exceptions," said Reilly in a press conference on Friday. " There was nothing in the deal that would change Microsoft's business practices in any substantial way." The Massachusetts lawsuit paves the way for higher courts to review the case including the antitrust remedies agreed to by Microsoft and the Department of Justice.

Reilly's lawsuit strikes out at the 97-page ruling issued on Nov. 1 by U.S. District Court Judge Colleen Kollar-Kotelly. Judge Kollar-Kotelly threw out a case by nine states against Microsoft and gave her stamp of approval to the proposed consent decree Microsoft signed with U.S. Department of Justice last November.

"The Microsoft case is the most important antitrust action of our time and will determine the future direction of our economy into the 21st century," Reilly said. "This case has serious implications for consumers and competition. Left to its own devices and without clear restraints, Microsoft will continue to engage in predatory practices and eliminate any real chance for consumer choice or business innovation."

Judge Kollar-Kotelly's ruling was viewed as a big win for Microsoft. Despite the fact that the software giant was found in violation of both Sections I and II of the Sherman Antitrust Act last year, Microsoft successfully avoided two penalties of most concern: a potential company breakup and government intervention in Microsoft's product development efforts. "There was nothing in the deal that would change Microsoft's business practices in any substantial way," said Reilly.

Nine states attorneys general had advocated harsher penalties, including one that would have required Microsoft, which has a tight grip on the desktop operating system, to make available a stripped-down version of Windows without Internet Explorer.

A number of solution providers say the government has no business dictating Microsoft corporate product development efforts. They say Microsoft has complied with the consent decree by making its OEM licensing terms more uniform, releasing hundreds of previously secret APIs and communication protocols and allowing more flexibility for OEMs and end users to display competitors' Internet programs on the Windows XP desktop.

Other solution providers claim the lenient treatment will allow Microsoft to extend its monopoly in the operating systems and applications market to the Web services era and crush rivals and future competitive technologies.

Reilly said competition is the key to the Massachusetts appeal. "When Microsoft illegally crushes a new idea, because it threatens Microsoft's monopoly, it is consumers who pay the price," said Reilly."Without competition, our economy has no future. It is what provides choices, spurs on new technology, and creates jobs. Consumers need to have, and are entitled to have, a decree which allows competition to grow in our marketplace, especially in this industry that is so vital to the strength of our economy and our nation."

Reilly said the appeal is also about accountability. "In today's corporate environment, some companies seem not to feel bound by the law, or by a sense of right and wrong," he said. "Microsoft has been found to have repeatedly violated the antitrust laws."

"I knew this would not be an easy path, and that this would end up having to be decided by higher Courts, one way or the other," Reilly added."The final word must come from the appellate courts."