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Microsoft remedies failed to create competition

MS will crush competitors when restrictions expire

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Microsoft will crush competitors when antitrust measures expire in the US in November in a marketplace that has not been made more competitive by the US Government's actions, according to a group of state attorneys general.

The US Department of Justice reached a settlement with Microsoft in 2002 over its unlawful use of its monopoly in personal computer operating systems. Most of the terms of the settlement expire in November.

The DoJ has just produced one of its regular assessments of the success of the settlement and the degree to which Microsoft is sticking to its terms. It said that Microsoft had kept to the agreement and that the deal had promoted competition.

Attorneys general in six states and in the District of Columbia disagree. "The remedies negotiated by the Department of Justice, and imposed by the court, have had little or no discernible success in restoring a competitive marketplace," Connecticut attorney general, Richard Blumenthal, said in a statement.

Microsoft had been found to have used its dominant position in the market for PC operating systems to ensure that computer manufacturers install its, not other firms', software. The dissenting states claim that the market is not more competitive now than it was then.

The DoJ disagrees, and said in its report that the remedies worked, and that the market is more competitive. The DoJ filing said that since the settlement, of final judgments, was put in place "there have been a number of developments in the competitive landscape relating to middleware and to PC operating systems generally that suggest that the Final Judgments are accomplishing their stated goal of fostering competitive conditions among middleware products, unimpeded by anticompetitive exclusionary obstacles erected by Microsoft.”

"The Final Judgments have been successful in protecting the development and distribution of middleware products and in preventing Microsoft from continuing the type of exclusionary behaviour that led to the original lawsuit,” said Thomas Barnett, assistant attorney general at the DoJ's Antitrust Division. “The Antitrust Division has made enforcement of the final judgments an important priority and will continue to vigorously enforce the antitrust laws in computer software markets.”

Microsoft general counsel said in a statement that the measures had made Microsoft put in place some voluntary principles which will continue to apply even when the settlement conditions expire in March.

Earlier this year Google asked a court to extend the settlement so that computer users would have a free choice of search products that was not influenced by Microsoft operating systems.

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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