States still mulling over Microsoft
Published: 06 Nov 2001 17:58 GMT
The response by the state attorneys general to the proposed antitrust settlement deal between Microsoft and the Justice Department remained up in the air at a crucial hearing on Tuesday before a federal judge.
Brendan Sullivan, the lead attorney for the states, said that the 18 attorneys general are divided into three groups: One wants to accept the settlement as it is, the second is undecided and the third wants to litigate.
"An extraordinary amount of work was done over the weekend," Sullivan said. "They negotiated until (12:30 PT, 8:30 GMT) this morning, and a redline (amended) version was dispatched to the Justice Department and the remaining states at (5:30 PT) this morning."
The states are considering the revisions to the proposal, and the main question on Tuesday morning is whether the undecided states will choose to join the settlement.
Among those present in the courtroom for Tuesday's hearing were representatives for New York, Connecticut and Iowa. Iowa has been among the leaders of the states in the three-year-old antitrust case. New York has recently indicated its willingness to settle. Massachusetts Attorney General Tom Reilly on Monday said he would not sign the deal, and bellwether California has seemed unlikely to settle as well.
The group that is inclined to litigate -- to pursue a stronger remedy -- is nonetheless "willing to continue mediation," Sullivan said, "if Microsoft is open-minded on the issues."
Federal Judge Colleen Kollar-Kotelly has given the states until 10 a.m. PT to work with mediator Eric Green and has asked the parties to return to court at 11 a.m. PT. Green called the states' late-night wranglings "an extensive effort."
If a settlement is agreed upon, the judge would have to review the deal to ensure that it is in the public interest and is not politically motivated. Other courses of action include continued litigation by the states, an outcome that Microsoft is hoping to avoid.
"Microsoft believes the settlement process will come to end" at 10 a.m. PT, said John Warden, an attorney for Microsoft. "The issues in this case have been beaten to death...by people who have been worn out."
The judge offered the possibility that any states that don't agree to the settlement could continue discussions rather than launch into litigation.
"Microsoft will never refuse to listen," said Warden. Still, he said, the company "contemplates a single document" coming out of the hearing, meaning no settlement other than the one between the company and the Justice Department, with whatever changes emerge on Tuesday.
The Justice Department and Microsoft delivered their settlement proposal to Kollar-Kotelly last Friday to meet a court-ordered deadline. The states have complained that they weren't given adequate input into the negotiations leading up to that settlement and that the proposal offers Microsoft too much wiggle room.
At the time, Attorney General John Ashcroft called the proposed settlement "strong and historic," and said that it would end "Microsoft's unlawful conduct."
But many others, from consumer groups to Microsoft competitors and antitrust specialists, have said that the deal goes easy on the software titan. The deal would impose relatively benign sanctions on the company, aimed mainly at tweaking its competitive behaviour and falling well short of the breakup that at one point had seemed a strong possibility.
The states were in turmoil over the weekend as they assessed the settlement offer and considered their response. Unanimity of response seemed unlikely, with many of the states expected to follow California's lead.
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