Wary Judge Casts Doubt On Microsoft Antitrust Pact Sharp Questioning May Indicate Accord Will Have To Be Renegotiated
Microsoft Corp.’s antitrust settlement with the government was thrown into doubt Thursday when a federal judge sharply questioned key parts of the pact reached by the top computer software maker six months ago.
In an order signed just a day before Microsoft and the Justice Department planned to seek final approval of the settlement, U.S. District Judge Stanley Sporkin in Washington said he would ask the two sides to explain why certain business practices were excluded from the historic accord.
Sporkin’s order is not itself a sign that he will reject the agreement. But it presented a tough agenda for winning his approval, which is required because he is responsible for overseeing the Microsoft settlement.
It also indicates the judge has taken into consideration many criticisms of the settlement, forged last July after a four-year government investigation of Microsoft over its top position in the multibilliondollar software industry.
The settlement preserved Microsoft’s dominance. If Sporkin finds it unacceptable, he could ask Microsoft and the Justice Department to try again. That raises the prospect of much harsher restrictions on Microsoft, and at its most extreme, splitting up the company akin to the way former phone monopoly AT&T Corp. was dissected more than a decade ago.
In his order, the judge said he wanted to know why Microsoft wasn’t required to establish a barrier between the development of operating software, which runs the basic functions of a personal computer, and applications software, programs such as word processing or spreadsheets.
Critics have charged the absence of such a barrier allowed Microsoft to use its dominance in operating systems to control another key market, giving it unparalleled strength.
The computer industry has been transfixed by the Microsoft case, awaiting the outcome in what could be a pivotal point in the phenomenally successful story of Microsoft and its awesome reach.
Sporkin, performing the required judicial review of antitrust cases, conducted two hearings last fall. He had previously indicated today’s hearing would be the final one but also invited comment from interested parties.
Two outside parties are expected today to get a chance to show why they should be heard in the case. Microsoft and the Justice Department have protested, saying the outsiders brought their objections too late.
His order late Thursday gave no indication whether the outsiders would be permitted to take a role.
Microsoft spokesman Greg Shaw said the company will be able to address the issues raised by Sporkin. “We’re hopeful the judge will grant this,” he said.
The judge said he also wanted to know why the settlement lacks a provision that bans Microsoft from misleading statements about products in development, a marketing practice known as “vaporware” that tends to prevent potential competitors from entering a market.