Microsoft Corp. proposed a set of remedies with a U.S. District Court Wednesday that could potentially bring its antitrust case to a close on terms similar to those agreed to in a settlement that it forged last month with the U.S. Department of Justice (DOJ) and nine states.
At the same time, the Redmond, Washington, software maker filed papers with the court rebutting a set of remedies proposed last week by its remaining state opponents, calling the demands in that filing “unworkable.”
Complying with instructions from District Court Judge Colleen Kollar-Kotelly, Microsoft offered its remedies as an alternative to the proposal submitted by the nine states and the District of Columbia, which did not sign off on the DOJ’s earlier settlement.
One of those remedies would allow PC makers to configure new computers with applications, such as media players and instant messaging clients, developed by vendors other than Microsoft. PC makers would also be able to sell computers installed with more than one operating system, or equipped with a “dual boot” feature that would allow users to open different operating systems when they start up their computer.
The nine states and the District of Columbia would not accept the terms of the DOJ’s settlement with Microsoft because, they said, it would not loosen Microsoft’s grip on the desktop operating systems market. Instead, the states submitted a proposal last week that asks for stiffer measures, including giving third-party software makers, as well as PC makers, access to the Windows operating system source code.
In a brief responding to the states’ settlement proposal, Microsoft urged a U.S. District Court to apply the proposed settlement already accepted by the DOJ and nine states to the hold-outs, saying that the states’ new proposal was “radical and punitive” and that the states can be bound by the first settlement.
Microsoft said that the nine hold-out states — California, Massachusetts, Connecticut, Iowa, Florida, Kansas, Minnesota, West Virginia, and Utah, as well as the District of Columbia — are seeking to broaden the antitrust settlement beyond its rightful scope and are attempting to damage Microsoft’s business.
Microsoft instead urged the court to rule that the current settlement proposal applies to all states, including the hold-outs. Because the settlement the company has reached is with the DOJ, which represents the U.S. public, all U.S. citizens will benefit from that settlement, including residents of the hold-out states, Microsoft said. As such, it urged the court to dismiss the hold-out states’ claims and rule that the proposed settlement agreed to by the DOJ and the nine settling states is sufficient.
The hold-out states’ new proposal would force Microsoft to open the source code to its Internet Explorer Web browser, aid in the porting of its Office suite to rival platforms such as Linux and provide the government with forewarning of any impending company purchases.
Calling the proposal “fundamentally misguided,” Microsoft said that these remedies would “result in, among other things, wholesale confiscation of Microsoft’s intellectual property and unprecedented government regulation of Microsoft’s product design decisions.”
The company said that such provisions would damage it, third party companies and consumers because, among other things, Microsoft wouldn’t have any incentive to improve Internet Explorer.
Further, Microsoft charged that the states are trying to impose a penalty on Microsoft, rather than propose a remedy, which is what the law calls for.
“It is readily apparent (both from the terms of their proposal and from their comments to the press) that the non-settling States seek to punish Microsoft and to advance the commercial interests of powerful corporate constituents” including Apple Computer Inc., Sun Microsystems Inc., Palm Inc. and Oracle Corp., Microsoft said.
The proposal “(seems) calculated to inflict maximum commercial harm on Microsoft,” the company went on to say.
Microsoft found further fault with the proposal, saying that it exceeds the boundaries established by the original rulings and case.