Federal Judge Rejects Microsoft Settlement

Article excerpt

WASHINGTON (AP) _ A federal judge rejected the Justice Department's proposed antitrust settlement with Microsoft Corp., saying it fails to break the software giant's monopoly or correct its "anticompetitive practices."

In a 45-page ruling issued late Tuesday, U.S. District Judge Stanley Sporkin said he was unable to find _ as required by law _ that the proposed settlement was in the public interest.

"Microsoft has a monopoly on the market for personal computer operating systems," Sporkin declared, noting that company's share of the market is consistently above 70 percent.

The proposed decree, he said, applies only to future licensing practices by Microsoft. The government, he added, failed to show how that would "remedy the unfair advantage Microsoft gained through its anticompetitive practices."

"Simply telling a defendant to go forth and sin no more does little or nothing to address the unfair advantage it has already gained," Sporkin wrote. "The decree is too little, too late."

Microsoft spokesman Mich Mathews said the company needed time to read Sporkin's opinion before deciding its next step.

"We are disappointed," Mathews said.

Justice spokeswoman Gina Talamona said antitrust division attorneys were reviewing the ruling. They declined further comment. "I'm going to read the opinion," said Attorney General Janet Reno.

Sporkin's rejection of the proposed settlement leaves the government with several options: It could appeal his ruling; it could go to trial on its allegations against Microsoft, or it could try to negotiate a new agreement with the company that would satisfy Sporkin.

Microsoft's stock fell 12 cents 61.87 Tuesday in NASDAQ trading, which was over before the ruling was announced.

Sporkin's refusal to approve the decree was highly unusual. But he has grumbled publicly for several months about the narrowness of the government's case.

The proposed settlement, which was reached last July 15, would have forced Microsoft to change the way it sells or licenses operating software to personal computer makers.

The company has enormous influence in the computer industry. Microsoft's MS DOS _ and its Windows program which allows the user to select visual images to issue MS DOS commands _ is the operating software for an overwhelming majority of the world's 150 million computers.

The settlement focused on prohibiting Microsoft from engaging in certain licensing procedures that the government argued gave the company an unfair advantage in selling its computer operating systems and other software to companies that make computer terminals and other hardware.

The agreement was reached after four years of investigation, first by the Federal Trade Commission, which was unable to act, and then by the Justice Department's antitrust division. …

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