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States Seek More Oversight of Microsoft

A group of states led by California said in a court filing Thursday that ending oversight of Microsoft's business practices in November would not allow enough time to consider the antitrust implications of Windows Vista.

Microsoft Corp., the Justice Department and the California group were asked to submit reports by Thursday on the effectiveness of the 2002 antitrust settlement, whose consent decree set rules that govern Microsoft's business practices.

The consent decree aimed to make it possible for Microsoft's middleware competitors -- software makers who built programs that run on top of the Windows operating system but act as a platform for other development, like a Web browser -- to compete fairly, even if Microsoft's operating system monopoly persisted.

"Microsoft has not directly contravened these provisions," the states' report said.

But the California group said that the consent decree has not yielded any more competition. The report cites Microsoft's continued dominance in the operating system market and the fact that few, if any, PC makers have sold computers with non-Microsoft Web browsers set as the default, among other examples.

The California group also said the January launch of Microsoft's latest operating system, Windows Vista, changes the game.

"As a practical matter, termination of the Final Judgment means ... plaintiffs will not be able fully to assess the impact in the marketplace of Microsoft's recent introduction of Vista," the group wrote.

In its report, the Justice Department said it appeared the consent decree was working. Web browsers like Mozilla's FireFox and Apple Inc.'s Safari present "renewed competition," as do the increasing popularity of programs available through a Web browser.

"The final judgments have been successful in protecting the development and distribution of middleware products and in preventing Microsoft from continuing the type of exclusionary behavior that led to the original lawsuit," Thomas O. Barnett, assistant attorney general in charge of the Justice Department's antitrust division, said in a statement.

The justice department said in its report that while Microsoft's operating system market share hasn't dropped because of the consent decree, "it would misapprehend the purpose of the Final Judgments to rely on these facts to argue that the Final Judgments have been ineffective. Microsoft was never found to have acquired or increased its monopoly market share unlawfully."

In its report, Microsoft directly countered California's claims and said, the "Final Judgments were never designed to reduce Microsoft's share in any putative market."

The federal court is expected to release a status report on Microsoft's compliance with the consent decree Friday.

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