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Settlement: 9 States In, 9 States Out

Microsoft Corp., the U.S. Department of Justice and nine states reached a proposed settlement in the antitrust case Tuesday. But with 9 other states and the District of Columbia passing on the settlement, the case remains far from over.

U.S. District Judge Colleen Kollar-Kotelly scheduled two tracks to accommodate the now split case. She scheduled hearings on one side to consider the settlement and hearings on the other side to continue the antitrust lawsuit.

Some media outlets were reporting splits among the states, indicating that six were still considering signing on to the deal. Massachusetts, the first to publicly reject the deal, California and Minnesota appeared to be taking the hardest line against the settlement. Both California and Massachusetts are home to some of the strongest industry critics of Microsoft.

Other states for now rejecting the deal are Connecticut, Iowa, Florida, Kansas, Utah, West Virginia and the District of Columbia. In a statement, Connecticut Attorney General Richard Blumenthal showed the ambivalence of some state attorneys general about rejecting the deal in his public comments Tuesday.

"My present intention is to continue as a party to the litigation, rather than sign the settlement submitted to the court today," said Blumenthal, citing "flaws" and "ambiguities" in the settlement. But he added that, "The agreement reflects good progress and shows how much we have accomplished already in our legal action."

Blumenthal said he will review the final changes made in the last-minute negotiations between the states, the DOJ and Microsoft. "I plan to make a final decision within the next few days."

A DOJ spokesman characterized the final changes as relatively minor. Given that several states are now staunchly outside the process, there is potential for the entire deal to fall apart. Under a federal law called the Tunney Act, the public must get a chance to make comments on an antitrust settlement between the federal government and a monopolist. Some legal observers say the fact that some of the parties criticizing the settlement will include states named in the antitrust filings will give their comments considerable weight.

The main points of the settlement reached Wednesday and presented to the court on Friday give PC makers the right to make changes to Windows, create an icon for removing Microsoft middleware from a system, make APIs open, give other companies a chance to review source code in a "secure" setting and create an independent oversight committee with access to Microsoft's financial books and technical materials.

Judge Kollar-Kotelly had given the states until Tuesday to reach a deal.

States signing on to the settlement are New York, Illinois, North Carolina, Kentucky, Michigan, Ohio, Wisconsin, Louisiana and Maryland. New Mexico settled with Microsoft earlier.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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