FC: DOJ: States have right to pursue Microsoft, but it would be stupid

From: Declan McCullagh (declanat_private)
Date: Tue Apr 16 2002 - 01:16:32 PDT

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    http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020416/wr_nm/microsoft_dc_148
    
    WASHINGTON (Reuters) - The U.S. government on Monday opposed Microsoft
    Corp.'s effort to throw out claims against it by nine states on
    grounds that a proposed antitrust settlement has already been reached
    with the federal government.
    
    While questioning the wisdom of the states' proposals, the Justice
    Department (news - web sites) said states refusing to back its
    settlement with Microsoft have the authority to pursue more severe
    antitrust sanctions, despite company claims to the contrary. [...]
    
    ---
    
    Microsoft statement:
    
       This afternoon, the Department of Justice filed an amicus brief, in
       response to a request by the Court, on our Motion to Dismiss.
       
       The following is a statement you can use on behalf of the company on
       today's filing by the DoJ.
       
       We are gratified that the Department of Justice has weighed in to
       support major elements of our motion to dismiss as well as the key
       points we made in our motions for judgment as a matter of law filed in
       court today.  In their brief, the DOJ acknowledges that our Motion to
       Dismiss raises important issues of federal antitrust enforcement
       policy that are significant in the Court's ultimate decision on this
       case.  The brief also confirms that the non-settling States are
       required to prove that they have sustained an antitrust injury as a
       result of Microsoft's actions, which the States did not do in their
       case-in-chief.  
       
       
       In addition to all of Section III of the DoJ brief (p. 21-26), the
       following excerpts underscore these points.
       
       
       p. 15-16
       
       The United States, of course, strongly believes that entry of the
       proposed final judgment in No. 98-1232 is very much in the public
       interest.  Further, the United States recognizes the danger that the
       relief being sought by the non-settling States - much of which
       diverges from the SRPFJ, but from any theory advanced or relief sought
       by the United States and the States earlier in this litigation - may
       harm consumers, retard competition, chill innovation, or confound
       compliance with the SRPFJ.  The United States is hardly indifferent as
       to the wisdom or propriety of granting such relief in this case. 
       
       
       p.26
       
       The non-settling States' remedial proposals are vast in their scope
       and potential impact upon the information technology sector of the
       U.S. economy and beyond.  They diverge from the proposed settlement
       not so much in their approach to prohibiting the specific conduct
       found by the Court of Appeals to be acts of monopoly maintenance, but
       rather in their effort to extend the relief to new products, new
       services, new markets, and even new theories of liability in the name
       of deterring future violations as a prophylactic matter.  Given the
       nature of state standing under Section 16, the Court may properly
       inquire in the exercise of its equitable discretion whether a small
       group of States are the parties best situated to obtain relief of such
       broad reach and implication.
       
       Proposed remedies without a clear basis in the decision of the Court
       of Appeals risk straying from appropriate antitrust enforcement
       grounded in law.  Proposed remedies that chill legitimate innovation
       and product improvement - even by a monopolist - can deprive the
       public of significant competitive benefits.  Perhaps most importantly,
       remedies that conflict with or undermine the enforcement judgments
       reached in the SRPFJ endanger our practical system of coordinated
       national antitrust enforcement.  These considerations become magnified
       in significance when, as here, the competitive issues are national in
       scope, the plaintiffs seeking relief have neither the authority nor
       the responsibility to act in the broader national interest, and the
       plaintiff with that authority and responsibility has taken a different
       course.  The emphasis upon the equitable powers of the Court in
       Clayton Act Section 16 is the means provided by federal antitrust law
       to avoid enforcement authority in this extraordinary case.
       
       
       If you have any questions, please call me, Jon Murchinson or Vivek
       Varma.
       
       
       Jim Desler
       
       Microsoft Corp PR
       
    
    
    
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