California and New York go hard on Microsoft

Two state attorney generals who are plaintiffs in the U.S. government’s antitrust suit against Microsoft Corp. Friday said they might press for more harsh remedies to impose on the software giant if they are not satisfied with the penalties sought by the Department of Justice (DOJ).

Eliot Spitzer, state attorney general for New York, and Bill Lockyer, California’s state attorney general, issued a statement Friday warning the DOJ that they would push to make sure remedies imposed on Microsoft are “forward looking” in regard to the forthcoming release of the Windows XP operating system and “will change the conduct by Microsoft that the courts have found to be illegal.”

The DOJ announced last Thursday that it would narrow its case against the software maker, noting it would not attempt to ask for a breakup of the company or pursue the issue of Microsoft’s “tying” its Internet Explorer Web browser to the Windows operating system.

The case proceeds this month in a U.S. District Court, where a judge was picked last month to decide a new remedy to impose on Microsoft. The U.S. Appeals Court for the District of Columbia overturned an earlier lower court ruling by Judge Thomas Penfield Jackson that would have broken the company into two, with one focusing on software and the other on operating systems. The new judge, Colleen Kollar-Kotelly, could have also been asked by the government to hear a separate case on the issue of tying.

In the statement Friday, the two state law enforcers said they are “committed to pressing the trial court for stringent remedies.” While they pledged to continue working with the federal government, they noted that they would, “if necessary to protect the public, press for remedies that go beyond those requested by the Department of Justice.”

The latest twist in the ongoing legal battle could be part of a strategy by the plaintiffs to put pressure on Microsoft, one legal expert said Friday.

“There are a couple of ways it could play out,” said Emmett Stanton, an antitrust attorney with Fenwick & West LLP in Palo Alto, Calif. “If the Justice Department negotiates a deal with Microsoft, (some) states might not sign on to that, and then (those) states would continue to litigate.

“There is also sort of a good cop, bad cop potential here,” Stanton added. “A cynic could think the Justice Department could use this to get Microsoft to agree to (a stringent settlement).”

If the DOJ does end up settling with Microsoft out of court, Friday’s statement suggests California and New York may continue to fight Microsoft in a District Court in the same way the 18 states and the DOJ remained parties in the lawsuit after New Mexico’s attorney general announced that state had settled with Microsoft.

Spitzer and Lockyer’s statement Friday came in contrast to announcements from other attorneys general who are leading the states’ efforts against Microsoft.

“We concur with the Department of Justice in today’s announcement,” Richard Blumenthal, attorney general of Connecticut, said in a statement Thursday. “This decision, while difficult, was driven by a realistic, clear-sighted view of the clock.”

The DOJ, and vocal supporters such as Blumenthal, have said this shift in strategy in the case will enable the court to impose remedies on Microsoft more quickly than if the case were to remain broad. “The result needs to be right but prompt, and this course seems the best realistic strategy to secure a remedy that is timely, effective, and certain,” Blumenthal said in the statement.

“The Court of Appeals opinion sent a strong message about the likely judicial view of breaking up the company as a remedy – a view that we would ignore at our peril. We may not agree with the Court of Appeals on breakup or tying, but it has set a standard that would mean protracted proceedings and delayed relief with a highly uncertain result,” Blumenthal concluded.

Iowa Attorney General Tom Miller also stood behind the DOJ’s announcement. “The states are joining with the Department of Justice in the decision not to seek the breakup of [Microsoft]. Since the court of appeals decision, the states and DOJ have directed their efforts to one object – the quickest and most effective remedy possible. This decision is consistent with that objective.”

Microsoft, in Redmond, Wash., can be reached at The California Attorney General is online at The New York Attorney General is online at