Massachusetts investigating Microsoft antitrust settlement

It's looking into possible violations of last year's deal with the government

July 8, 2003 (IDG News Service)

The attorney general of Massachusetts is investigating possible violations by Microsoft Corp. of its November 2002 antitrust settlement with the U.S. government and a number of states.
In a status report submitted by the state in the District Court for the District of Columbia and made public yesterday, Massachusetts Attorney General Tom Reilly said the state is following up on complaints and tips about "several issues" that may be in violation of the antitrust settlement.
The status report listed five possible infractions, the report said. Among other things, Massachusetts will look into whether Microsoft retaliated against a manufacturer for promoting the rival Linux operating system and entered into agreements with an Internet service provider that limit competition in the middleware market.
Microsoft spokesman Jim Desler called the state's allegations "vague and meritless" and said the company is complying fully with all aspects of the final settlement.
In the report, Massachusetts said it's being hampered in its efforts to pursue investigations of Microsoft by agreements between the U.S. Department of Justice (DOJ) and the states that have settled. These agreements prohibit the states that have settled from joining in investigative work with Massachusetts, according to the report.
The state is denied access to leads sent to the enforcers for the other states and barred from accessing information about Microsoft's compliance efforts that is available to the other states, the report said. "The exclusion of Massachusetts has been effective and complete," it said.
Reilly's office also complained in the report that Microsoft didn't respond to a May request by the court to provide plaintiffs in the antitrust suit with information on the company's compliance efforts.
Requests for information submitted by Massachusetts to the compliance officers on Microsoft's Technical Committee went unanswered, and the committee is apparently without offices or phone numbers, the report said.
However, Desler countered, Microsoft did furnish the Massachusetts attorney general's office with the requested material by fax and e-mail, and the technical committee does have phones and offices and is being supported by Microsoft in compliance with the settlement decree.
Massachusetts is the only state that participated in the antitrust suit that's still appealing the government's settlement with Microsoft, after West Virginia settled its dispute with the company last month (see story).
Microsoft has recently been critical of the state's continued opposition to the terms of the settlement, saying the remedies that Massachusetts proposed would benefit its competitors at a cost to consumers (see story).
Denied access to information used by the other litigating states, Massachusetts will attempt to gather information on violations itself, the report said. The state will set up a Web site to collect complaints and will monitor its telephone hot line for Microsoft-related complaints. In addition, Massachusetts plans to gather information from industry groups and the press about Microsoft's conduct.
The state's report comes amid growing dissatisfaction with Microsoft's efforts to comply with the November 2002 antitrust settlement. On July 4, the DOJ and the states involved in the case issued a joint status report that expressed "concern" about the royalty rates and terms Microsoft proposed in return for access to its communications protocols.
Calling the licensing program "complex" and "unprecedented," Desler acknowledged that some changes may be necessary.
"We realize and welcome industry feedback and the government's feedback. We made changes [to the licensing program] and are open to making additional changes that we hope will improve the program," he said.
Massachusetts' actions aside, Microsoft's compliance is being measured by what Desler termed "legitimate enforcement authorities" such as the courts, the DOJ, states and Microsoft's board of directors.
It will now be up to U.S. District Judge Colleen Kollar-Kotelly to review the reports by Massachusetts and the other states, according to Bob Schneider, an attorney at Chapman and Cutler LLP in Chicago. If Kollar-Kotelly decides that there is merit to the complaint and that a serious violation of the antitrust agreement has taken place, she could hold Microsoft in contempt, Schneider said.