Massachusetts said yesterday that it would pursue an antitrust case against Microsoft Corp. even as seven other states and the District of Columbia announced they would not appeal a federal judge's approval of a settlement between the company and the government.The decision by Massachusetts Attorney General Thomas F. Reilly keeps alive the hardest-fought and most costly antitrust case of a generation, but just barely. West Virginia said it will decide by Monday whether to join Massachusetts.
Microsoft has agreed to pay $28.6 million to states that agreed to a settlement -- $25 million for legal bills amassed over four years and $3.6 million for technical experts and other resources to ensure that the company complies with the settlement. The states can ask a judge to order Microsoft to pay more, according to the terms of the agreement.
Microsoft, which once faced the prospect of being split into two companies to restore competition to the market for personal computer operating systems, continues to do business much as it did before 1998, when the Justice Department filed an antitrust lawsuit against it. The company has made few major changes to its core software business, industry experts say.
U.S. District Judge Colleen Kollar-Kotelly ruled on Nov. 1 that the settlement was in the public interest and offered sharp words to states that continued to insist on more stringent concessions from the company. Among other provisions of the settlement, the company must disclose more of its computer code to rivals, give Windows operating-system users the ability to hide applications such as the Internet Explorer Web browser and the Windows Media Player, and hire a compliance officer to look into violations of the deal.
Reilly said Microsoft's still-dominant market position influenced Massachusetts's decision to appeal. The settlement is "filled with loopholes and exceptions," Reilly said at a news conference yesterday. "There was nothing in the deal . . . that would change Microsoft's business practices in any way."
Massachusetts authorities said they would focus their appeal on whether Microsoft could continue to tie important source code from its Windows operating system to its Web browser. They also will ask the court to issue a broader definition of "middleware," the software applications that run on top of a computer's operating system.
An appeal to the U.S. Court of Appeals for the D.C. Circuit could take a year or longer, lawyers involved in the case said. Reilly declined to say how much the appeal would cost.
Justice Department spokeswoman Barbara Comstock said an appeal by Massachusetts does not affect enforcement of the settlement. "The department continues to be pleased with the court decision from earlier this month, which is a victory for consumers and businesses," she said.
Microsoft spokesman Jim Desler said, "Regardless of which states decide to pursue an appeal, our focus is on complying fully with the court's judgment."
Some legal analysts said yesterday that the case was too important not to be reviewed by higher courts. Lloyd Constantine, a former New York antitrust official who is in private practice, pointed out that the Microsoft dispute had never been heard by the Supreme Court and said he "respected" Massachusetts for appealing.
"I think the chances are slim at the next stop, but this is a very important case, a case where everything that can be done should be done," Constantine said.
"Ultimately, the district court should not be disposing of such issues," said Mark Cooper, research director at the Consumer Federation of America. "The stakes are very high."
West Virginia Attorney General Darrell V. McGraw Jr. will announce on Monday whether his state will appeal the settlement. Calls to McGraw's office went unanswered yesterday. Monday is the deadline for notifying the court of an intent to appeal.
Iowa Attorney General Thomas J. Miller, one of those who led the states' challenge to Microsoft, said yesterday that the best strategy would be to ensure that the company follows the settlement terms.
"We're very serious about enforcement," Miller said. "We're going to be watching to make sure they follow the decree, the letter and the spirit of it," Miller said. But, he said, "the best course for us is to turn the page."