Update: Settlement foes propose stiffer remedies for Microsoft

WASHINGTON -- The antitrust settlement between Microsoft Corp. and the U.S. Department of Justice (DOJ) needs to be amended because it doesn't ensure competition between Microsoft and its rivals, the state of Massachusetts and an IT industry group argued Tuesday.

Microsoft should have to release the code for its Internet Explorer (IE) browser and allow original equipment manufacturers (OEMs) to make any IE functions invisible to end users, argued Steven Kuney, lawyer for the state of Massachusetts, before the U.S. Court of Appeals for the District of Columbia Circuit.

Massachusetts is the lone remaining state appealing the Microsoft antitrust settlement, along with two industry groups -- the Computer & Communications Industry Association (CCIA) and the Software & Information Industry Association (SIAA).

In addition, Robert Bork, lawyer for the CCIA, argued that a "special master" be appointed by the court to investigate any reports of violations of the antitrust settlement, approved by U.S. District Court Judge Colleen Kollar-Kotelly in Nov. 2002, but Microsoft and DOJ lawyers argued that the antitrust settlement was "clear and consistent."

The court system doesn't work fast enough to deal with potential violations of the settlement, thus the need for a special master, Bork said. "We need a fast-acting remedy," he added. "This is a fast-moving area of technology."

But judges questioned why courts weren't adequate to resolve the issue and why a special master is needed when no evidence exists that Microsoft has violated the settlement.

Microsoft has fully acknowledged earlier court antitrust findings and is working to comply with those court orders, said Brad Smith, senior vice president and general counsel for Microsoft. "We took steps together with the government to rectify each and every one of those issues," Smith said after the hearing.

Bork and Kuney argued the requirement for Microsoft to separate the IE code from the Windows operating system isn't doing enough to encourage OEMs to replace IE with competing browsers. Microsoft wasn't required to completely remove the IE code because it adds functionality to programs such as the Help program, but Kuney argued that Microsoft should have to remove IE identification from any functions that could pop up on users' screens. "There's a difference between making use of some of the Internet Explorer and having the user seeing Internet Explorer pop up in its full glory on the screen," he added.

Without that kind of limit on IE, users will be confused about their browser choices, OEMs will have little incentive to install competing browsers and developers will have no incentive to write software that works with competing products, Kuney said.

Removing the IE icon from desktops isn't enough to encourage competition, Bork added. He also argued that settlement requirements for Microsoft to disclose some of its APIs were inadequate. The result is a settlement that was "totally inadequate," he said. "This decision doesn't remedy a thing that Microsoft did," Bork added. "The government had this case cold and there was no reason to negotiate away what it did."