Appeals court backs Microsoft-DOJ antitrust settlement

Computerworld - WASHINGTON -- After a six-year court fight between Microsoft Corp. and the federal government and nearly 20 U.S. states, a federal appeals court today rejected efforts by opponents seeking harsher penalties than those included in the antitrust settlement with the company.
The U.S. Court of Appeals rejected an appeal from Massachusetts, the lone holdout state, which has been fighting a 2001 lower court ruling that tossed out most of the remedies sought by the nine states that at the time refused to accept the federal settlement.
Those other states eventually settled with the company. But Massachusetts continued seeking remedies that would have included forcing Microsoft to unbundle its media player from Windows, turn Internet Explorer into an open-source application and allow the porting of Microsoft Office to other operating systems, such as Linux.
Microsoft fought those tougher sanctions and argued that the remedies imposed by the lower court, which regulated its business practices, were more than enough to deal with its antitrust violations.
In an 83-page decision released today, the court largely agreed with Microsoft.
The lengthy decision went through a point-by-point rebuttal of the claims raised by the opponents and said broadly that the remedies set out by the lower court can ensure competition. That ruling, the appeals court wrote, "restores the conditions necessary for rival middleware to serve as a platform threat to Windows."
In a statement, Massachusetts Attorney General Thomas Reilly called the decision, "bad news for competition and ultimately ... bad news for our economy.
"This clearly shows that our antitrust laws are not effective in protecting consumers," said Reilly. "Our high-tech economy will not reach its full potential unless regulators and the courts are willing to deal with Microsoft and its predatory practices."
However, Brad Smith, Microsoft's senior vice president and general counsel, said that the unanimous decision by the six judges "sends a clear and emphatic message that the settlement reached two years ago is a fair and appropriate resolution of these issues.
"At the heart of this case was the question of whether Microsoft should be required to remove software code from our products, or provide multiple versions of our products with certain features removed," said Smith in a statement. The decision, "clearly states that removing code would be a huge step backwards for consumers and for the industry as a whole."
Also involved in the appeal were two trade groups that represent many of Microsoft's competitors, the Computer and Communications Industry Association and the Software and Information Industry Association.