New threat to Microsoft deal

The state of Massachusetts has refused to sign the anti-trust settlement agreed between the US Government and Microsoft on Friday, putting the deal under pressure.

Eighteen states were co-plaintiffs with the federal government in the three-and-a-half-year-old anti-trust case, in which Microsoft was found guilty of abusing its Windows operating system monopoly.

The states have until Tuesday to sign up or else it could go back to court.

Massachusetts' dissent raises the question of whether some states might pursue a separate case against Microsoft.

Settlement terms

The proposed settlement requires Microsoft to reveal technical information to competitors and bans exclusive agreements for Microsoft products.

The deal imposes no penalties against Microsoft. Critics of the settlement have called for the deal to be rejected because of its lenient treatment of Microsoft.

Many of the 18 states reportedly agreed on Sunday to ask for changes on a dozen specific points in the settlement.

The Wall Street Journal reported state officials studied the 22-page document at the weekend, and some decided it had so many escape clauses that some provisions would either not work or be evaded.

The Massachusetts Attorney General Tom Reilly was not prepared to accept the terms negotiated last week between the software giant and the US Justice Department, a spokeswoman said.

Massachusetts has a large base of technology companies.

Iowa Attorney General Tom Miller, co-ordinator of the case for the states, said some attorneys general declined to sign up to the agreement because "we believe that it is imperative that we fully assess the specific language of the agreement".

Some support

Some states have welcomed the deal.

Illinois Attorney General Jim Ryan said on Friday he was "pleased" and was "inclined to sign on to the settlement agreement because the terms appear to achieve the overall objectives of our lawsuit."

New York Attorney General Eliot Spitzer said the draft deal "represents an enormous step forward" but "doesn't give us everything".

Meanwhile, the European Commission said it was continuing its probe into Microsoft. "The investigation is ongoing and in a preliminary stage," said an EU spokeswoman.

In October, Microsoft was given more time to answer the EU's queries about allegedly anti-competitive business practices.

The EU warned in August that Microsoft may be violating antitrust laws by bundling Media Player into its Windows operating system.