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Tuesday, 6 November, 2001, 23:55 GMT
Microsoft's future in judge's hands
Judge Colleen Kollar-Kotelly.
Judge Colleen Kollar-Kotelly is hearing the arguments
Kevin Anderson

Microsoft's future now is in the hands of Judge Colleen Kollar-Kotelly.

She has wide discretion over how the anti-trust case proceeds, and she has established a process that will allow the case to go forward on two parallel tracks.

Hearings will proceed to review the proposed settlement, and the antitrust case will proceed with possible remedy hearings scheduled for next spring.

The states opposed to the settlement have vowed to fight on but left open the possibility that they might settle with Microsoft if they win further concessions.

The next steps

Microsoft tried to block the case from proceeding on two tracks, saying that the states opposed to the settlement did not have the legal standing to pursue the case on their own.

But Judge Kollar-Kotelly rejected Microsoft's motion.

The software giant must now prepare with the federal government and half of the states to defend the proposed settlement while also preparing for full-blown remedy hearings that could begin next spring.

She still has to review the settlement under a 1974 US law called the Tunney Act.

The law was passed as part of reforms enacted after the Watergate scandal, when it was alleged that President Richard Nixon's administration settled an anti-trust case after receiving a $400,000 campaign contribution to Mr Nixon's Republican party.

The act is supposed to ensure that no undue political influence was exerted in crafting a remedy.

Once the settlement is signed by Microsoft, the federal government and supporting states, a 60-day public comment period begins.

After the public comment period, Judge Kollar-Kotelly will then hold hearings to review the settlement.

Before the states dissented, most legal experts predicted a relatively straightforward process with few changes to settlement and a good chance of approval, but with some states dissenting, they say we are entering uncharted legal territory.

Prepared to fight on

In a statement Tuesday, Microsoft Chairman Bill Gates said that he hopes that the dissenting states will join in the settlement.

"We hope that the remaining states will join in this agreement so that everyone can focus on the future and avoid the unnecessary costs of delays and further litigation," he said.

But attorneys general from the dissenting states continued to heap contempt on the proposed settlement and vowed to fight on.

"There is no question in my mind that five minutes after any agreement has been signed with Microsoft they will be looking for ways to violate that agreement," said Massachusetts Attorney General Tom Reilly.

With two tracks there are several paths the players could follow.

The states opposed to the settlement now could choose to fight the settlement on either or both of the tracks that the judge has laid out for the case.

They could proceed to prepare for remedy hearings scheduled for next spring, or they could also appear in the Tunney Act hearings to oppose the federal settlement. Or they could do both, said Howard University law professor Andrew Gavil.

If the judge imposes sufficient additional remedies, they might drop their objections, or they might push for additional remedies during hearings next spring, if the case continues on to that step.

"They are two paths to same end," Mr Gavil said.

The judge's discretion

But more than simply overseeing the process, Judge Kollar-Kotelly has significant input in amending the settlement or handing down a new set of remedies.

She could approve the settlement during the Tunney Act review, which would add additional pressure on the dissenting states to settle.

And "if she smells the possibility for the states and Microsoft to agree, she might stay the antitrust proceedings," thereby stopping the process for the remedy hearings next spring, Mr Gavel said.

And some of the dissenting attorneys general left open the possibility of settling in the future. "I don't rule out the possibility of settling with Microsoft," said Tom Miller, attorney general of Iowa.

Judge Kollar-Kotelly could use the settlement as a baseline and add additional remedies, he added, and the dissenting states might sign on to a revised settlement.

And Mr Gavil also cautioned that Judge Kollar-Kotelly's wish that the case be settled quickly should not be read as any indication on how she will rule on a possible settlement.

"She clearly wanted it settled and settled quickly," Mr Gavil said, but that says little about what remedy she favoured.

And she may propose changes to the settlement if she hears a lot of hostile commentary criticising it as inadequate, he added.

See also:

05 Nov 01 | Business
New threat to Microsoft deal
24 Oct 01 | Sci/Tech
Microsoft's XP extends reach
06 Sep 01 | Business
U-turn on Microsoft break-up
13 Jul 01 | Business
US seeks quick end to Microsoft case
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