States Seek Extension of Microsoft Antitrust Oversight

As expected, California and a slew of other states this week filed a formal request with U.S. District Judge Colleen Kollar-Kotelly to extend the oversight of Microsoft’s 2002 landmark antitrust settlement until November 2012.

Many of the settlement’s conditions are set to expire next month.

And in a surprise move, New York, Louisiana and a handful of other states have submitted their own request to extend oversight, a Microsoft spokesperson said this afternoon. Those states had been expected to sign off on the U.S. Department of Justice’s recommendation that most oversight measures be allowed to lapse.

In its filing, the so-called “California Group,” which in addition to California includes Connecticut, Iowa, Kansas, Massachusetts, Minnesota, and the District of Columbia, claims that problems remain surrounding communications protocols Microsoft has provided to competitors. They continue to say that despite restrictions on Microsoft, no major PC vendors currently bundle any third-party Web browsers, thus leaving Microsoft in a strong position vis-à-vis other middleware competitors.

The filing argues that the measures in place to protect middleware vendors are now more important than ever. It cites the recent introduction of Microsoft’s Silverlight streaming media platform, as well as Microsoft’s dropping of distribution of Adobe’s Flash player when it introduced Windows Vista earlier this year.

“Should the final judgment expire now, Microsoft has the power to tilt the playing field toward its own technology, Silverlight,” the group’s filing states.

Other emerging middleware is also threatened if oversight is relaxed now, including “Internet-centric middleware such as Google Gears and the Adobe Integrated Runtime,” the group alleges.

The U.S. Department of Justice (DoJ) and five states that are parties to Microsoft’s 2002 antitrust settlement, including New York and Louisiana, filed a review of the case with the court in late August, endorsing the scheduled lapse of most oversight, and saying that during the five years it has been in effect the settlement has served its purpose.

At that time, however, the California group of states — so-called due to the state’s leadership in protesting the end of most oversight — filed its own review, which came to nearly opposite conclusions.

The California group subsequently followed up when it presented their arguments to Judge Kollar-Kotelly in a status hearing in mid-September. The judge told the group that it had until October 15 to file a formal proposal to extend oversight.

“Extending the final judgment will not inhibit Microsoft from innovating. It may, however, encourage others to innovate, to introduce new products into markets still largely devoid of competition, and to provide meaningful choice to consumers,” this week’s filing by the group said.

The DoJ is expected to file a response within the next few days.

Judge Kollar-Kotelly is scheduled to hold a hearing on the filings in early November.

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