Extension of Microsoft Antitrust Pact Requested

By Catherine Rampell
Washington Post Staff Writer
Wednesday, September 12, 2007

In an eleventh-hour request, a group of six states and the District yesterday asked a judge to extend the terms of Microsoft's antitrust settlement through 2012.

Most of those provisions are scheduled to expire in November.

"Microsoft continues to have a stranglehold on the two products, Windows and [Internet Explorer], that almost all consumers use for accessing these Web services and applications," Stephen Houck, a lawyer for the California group representing the states told U.S. District Judge Colleen Kollar-Kotelly.

The group requested the extension to maintain oversight over Microsoft, particularly over its new operating system, Windows Vista. The terms of the consent decree were set in 2002.

In their court filings of two weeks ago, neither the California group nor the other plaintiffs had requested an extension of the decree. In fact, the Justice Department and another group of states, the New York group, agreed that Microsoft had been complying with the requirements that expire in November and indicated they thought the decree had been successful.

In its filing last month, the California group argued that the decree had not been effective in reducing Microsoft's market dominance. Microsoft owned 92 percent of the PC operating systems market in 2006, down from 97 percent in 2002. It owned 85 percent of the Web browser market last year, an area where Firefox has made some inroads. Its share of the Web browser market was 95 percent in 2002, according to the filing.

"These are the same plaintiffs who in August issued a filing saying they didn't like the decree," said Rick Rule, an attorney for Microsoft. "Now they're asking for it to be extended."

Because the other parties to the suit were informed of this proposal only late last week, Kollar-Kotelly asked the California group to file a written proposal by Oct. 15 laying out the terms and rationale behind the extension. Microsoft will have until Oct. 19 to request a timeframe for its response.

"The California group is facing a difficult burden in persuading the court to extend the decree," said Andrew I. Gavil, a Howard University law professor and co-author of a book on Microsoft's antitrust case. "The terms of the decree say they have to prove to the court that Microsoft has engaged in 'willful and systematic violations' of the decree."

Both sides have also questioned the effectiveness of the decree. Kollar-Kotelly said that its effectiveness should not be measured by Microsoft's market share, because the 2002 decree did not specifically set out to reduce Microsoft's dominance . Its intent was to correct Microsoft's anticompetitive practices, she said.

At the hearing, the New York group and the Justice Department also requested more time to decide how to respond to the California group's proposal. Extending the decree by five years could put the case in the hands of a new administration with a different philosophy of regulation, Gavil said.

Before these parties and Microsoft respond, though, they will have a benchmark to guide them: The European Union will announce its Microsoft antitrust decision on Monday.

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