Originally created 01/24/04

Microsoft judge says key part of deal not working



WASHINGTON -- The trial judge in the Microsoft Corp. antitrust case acknowledged Friday one important provision in the settlement she approved isn't working as well as expected, but she defended the agreement as otherwise effective.

U.S. District Judge Colleen Kollar-Kotelly said during a brief court hearing that the provision Microsoft negotiated with the Bush administration has "not yielded the hoped-for results." She gave lawyers from Microsoft and the Justice Department months more to continue investigating why it was unsuccessful.

"The plaintiffs appear not to have a full grasp yet as to the reasons for the situation," she said.

The settlement, aimed broadly at restoring competition in the technology industry, compels Microsoft to offer its technology to rivals to build products that seamlessly communicate with computers running Windows software.

The judge speculated that competitors might be awaiting the outcome of "some external proceedings," a veiled reference to a U.S. appeals court ruling expected in the coming months to decide whether sanctions in the settlement she approved were adequate. One state, Massachusetts, is pressing for tougher penalties against Microsoft.

Kollar-Kotelly indicated that she was generally satisfied with other parts of the antitrust deal. She set another oversight hearing for April 21.

"The decree seems to be operating," she said.

Lawyers for Microsoft and the Justice Department had disclosed earlier that only 11 competitors have paid Microsoft for licenses so far, fewer than the judge and government antitrust officials had expected.

The Justice Department said earlier in court papers that Microsoft has agreed to change the license agreements to make them more attractive for competitors. But even after changes are made, government lawyers warned that they "cannot foresee with confidence that the improvements will be sufficient and remove the need for further changes."

A Microsoft lawyer, Rick Rule, said the company had simplified the license agreements, cutting the contracts from 30 pages to 14 and changing the way some prices were calculated to a flat fee from a percentage of revenues. He promised Microsoft was "willing to go that extra mile" to make the agreements more attractive for its rivals.