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Now that the U.S. Department of Justice and the Microsoft Corp. have announced a settlement of their landmark antitrust case, the spotlight in the long-running litigation is landing squarely on U.S. District Judge Colleen Kollar-Kotelly in Washington, D.C. Kollar-Kotelly, who made it clear from the outset that she strongly preferred a settlement to a trial, has essentially played the role of a facilitator since the case landed on her docket in August. When the parties couldn’t work out a deal on their own, she picked a mediator: Eric Green of Boston University Law School. Green’s efforts bore fruit within weeks, ending with the Nov. 2 announcement of the settlement. But Kollar-Kotelly has not yet had to grapple with the complicated antitrust issues relating to Microsoft’s competitive behavior or with the intricacies of the software industry. Soon she will have to do just that. On Nov. 6, the 18 states that, along with Justice, are plaintiffs in the case, will reveal whether they will sign on to the deal. No matter what they decide, Kollar-Kotelly has indicated she will begin to follow the carefully scripted procedures under the Tunney Act, a 1974 statute that governs settlements in DOJ antitrust cases. Under the Tunney Act, a U.S. district judge is supposed to approve a settlement only if he or she finds the settlement to be in the public interest. The judge must first set out a 60-day period for public comment. Justice then has 30 days to respond. Of course, since United States v. Microsoft has been anything but the typical antitrust case, the Tunney Act process will be anything but usual. Hundreds of corporations, individuals, and trade groups, both supporting and opposing the settlement, will likely file comments. Kollar-Kotelly, who has served on the federal bench since 1997, will hold a hearing and write an opinion either adopting or rejecting the settlement. That opinion can be appealed to the U.S. Court of Appeals for the D.C. Circuit. In open court Nov. 2, Kollar-Kotelly said she thought the comment period could begin as soon as Nov. 16. That would place the DOJ response in mid-February 2002, and the judge said she expected to hold a hearing soon after that. Both supporters and opponents of the government’s case say they believe it unlikely that Kollar-Kotelly will use the act to block a settlement. “The whole point of the [Tunney Act] was to detect improper political influence,” said Robert Lande, an antitrust professor at the University of Baltimore who has been critical of Microsoft. “No one is alleging that has occurred here. So I’d expect a quick rubber stamp.” The law was passed in the post-Watergate era to prevent abuses such as the alleged decision by the Nixon administration to settle an antitrust case in exchange for a $400,000 corporate contribution to the Republican National Committee. James DeLong, a senior fellow at the Competitive Enterprise Institute who opposes the government’s case, agrees with Lande. “I don’t know of any other cases, other than the earlier Microsoft case before [Judge] Stanley Sporkin, where the Tunney Act was used to reject a settlement,” DeLong says. DeLong was referring to a 1995 opinion by Sporkin, now retired, that tossed out a consent agreement between Microsoft and Justice in an earlier antitrust case. Later that year, the appeals court reversed Sporkin, finding that he had exceeded his Tunney Act authority. But the D.C. Circuit took the opportunity in that ruling to discuss at length the proper role of a federal trial judge under the statute. In words that Kollar-Kotelly will no doubt read with care, the circuit gave a district judge a broad and important role. “When the government and a putative defendant present a proposed consent decree to a district court for review under the Tunney Act, the court can and should inquire … into the purpose, meaning, and efficacy of the decree,” the circuit court wrote. “If the decree is ambiguous, or the district judge can foresee difficulties in implementation, we would expect the court to insist that these matters be attended to. And, certainly, if third parties contend that they would be positively injured by the decree, a district judge might well hesitate before assuming that the decree is appropriate.” During the comment period, Kollar-Kotelly can expect to see some arguments that will put her to the test. Under the terms of the settlement unveiled on Nov. 2, Microsoft must provide software developers with the code that permits Microsoft’s “middleware” applications such as Internet Explorer to interact with the operating system. Microsoft is prohibited from retaliating against companies that use competitors’ products and from entering into exclusive software development agreements with other companies. One major objection that the court will see, says Thomas Lenard, vice president for research at the D.C.-based Progress and Freedom Foundation, is that the settlement will have little effect on the software industry.”The decree does nothing to inhibit Microsoft from leveraging its browser monopoly into new markets,” says Lenard. “At a minimum, a settlement should do that.” Many objectors may contend that the settlement will be ineffective because it does not order the breakup of Microsoft, a remedy that Justice had pursued under the Clinton administration but dropped recently. “There is clear experience that suggests that structural relief is the right course,” says David Balto, a former Federal Trade Commission policy planning director and now a partner at the Washington, D.C., office of White & Case. Many objectors will argue that the provision that sets up a panel of on-site computer experts who can monitor and resolve disputes is cumbersome and ineffective. Edward Black, CEO of the Computer & Communications Industry Association, a leading anti-Microsoft trade group, says a key issue under the Tunney Act will be what he calls “Microsoft’s history of lack of good faith in compliance” with earlier government antitrust decrees. “People will argue that a full examination of the record of Microsoft’s evasions is essential. That must be looked at by the judge,” Black says. “The Tunney Act has, historically, been applied only to small companies,” Black says. “There has probably never been a case in the history of the Tunney Act that has dealt with the basic concerns of the act — large corporations and their power — the way this case does.”

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