Microsoft to Face Congress

Baldwin Louie — Tue, 24 Jul 2001 15:00:00 -0700

WASHINGTON – The two sides in the Microsoft antitrust case met here Monday to outline procedures for a new round of settlement talks, according to a spokeswoman for New York Attorney General Eliot Spitzer. A Microsoft spokesman declined to comment about the meeting or to say whether Chairman Bill Gates, who was in town for the funeral of former Washington Post publisher Katharine Graham, attended the talks.

Separately, the Senate Judiciary Committee plans to hold a series of hearings beginning in September on Internet competition – hearings that are scheduled to include an examination of Microsoft’s Windows XP operating system.

Sen. Charles Schumer (D-N.Y.), a committee member, is holding a press conference Tuesday morning in part to ask all 50 state attorneys general to consider seeking an injunction against Windows XP. The 18 state attorneys general involved in the case have declined to comment on whether they’ll seek such an injunction.

Schumer released a letter to the Justice Department, asking it to incorporate Windows XP in settlement talks. In a statement, Schumer said he is asking the department and the states not to settle with Microsoft unless the company agrees to allow competitors to offer software on Windows XP on an equal basis with Microsoft’s own software.

Schumer has also sent a letter to Microsoft CEO Steve Ballmer, telling him that Windows XP "could cause grave harm to consumers," as well as to Internet competition between Microsoft and companies such as AOL Time Warner, Eastman Kodak and Real Networks. Schumer asked Ballmer to allow computer makers and Windows XP users to choose among competing media players, instant-messaging software and other applications.

Microsoft issued a statement saying the company "does not believe the complaints of AOL and Kodak merit a congressional hearing" and that "many analysts and industry observers believe Windows XP will give the PC industry and the economy a much-needed boost."

The Judiciary Committee plays no formal role in the case. But a committee hearing will shine a new spotlight on the company’s business practices, making it even more difficult for Microsoft to settle the case on favorable terms.

A federal appeals court ruled June 28 that Microsoft illegally maintained a monopoly in Intel-compatible PC operating systems. The appellate court said it would send the case back to a new district court judge for further proceedings on a remedy.

The government has asked that the case be sent back right away, and state attorneys general have said that Windows XP is fair game in the new courtroom round. Microsoft has asked for a rehearing on one aspect of the appellate court ruling and has said it might appeal the entire ruling to the U.S. Supreme Court.

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Microsoft to Face Congress