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If anyone thought that the contentious Microsoft antitrust case was ready to gradually wind down in a rush of good feeling, the filing of Thursday’s “Joint Status Report” in the case will put an end to such hopes. The report, which was ordered last month by Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia but was postponed six days in the aftermath of last week’s terrorist attacks, proves to be “joint” in name only. It’s apparent that even after the government announced Sept. 6 that it was dropping its controversial demand that the software firm be broken up, the gulf between the parties looms as wide as ever. Kollar-Kotelly wanted the report to set forth all areas of agreement on procedural matters, such as identifying the remaining issues and setting a schedule for the case now that it has been returned from the U.S. Court of Appeals for the D.C. Circuit and assigned to a new trial judge. But the report, while signed by both parties’ lawyers, is composed almost entirely of opposing views on the issues, coupled with testy arguments. The chief issue centers on Microsoft’s insistence that the “conduct remedies” that the government is still seeking — essentially, court orders that the company stop engaging in certain anti-competitive business practices — are excessive and unjustified by the evidence from the original trial before Judge Thomas Penfield Jackson. Microsoft says in the joint report that before it can even propose a schedule for a remedy hearing in Kollar-Kotelly’s court, it first wants the judge to rule on whether the Justice Department and 19 states are even allowed to aim for these remedies. Although “at first blush” the conduct proposals appear “less extreme than breakup,” Microsoft lawyers write, they are in fact “similarly radical and would retard rather than promote competition and innovation in the PC industry.” Specifically, Microsoft says, the conduct remedies “would result in, among other things, wholesale confiscation of Microsoft’s intellectual property and intrusive governmental regulation of Microsoft’s product design.” Microsoft says that if it wins on this contention, a remedy hearing should then begin no sooner than three months from the judge’s ruling. If it loses and the remedies stay in, the hearing shouldn’t occur until six months from the ruling. The government, expressing its views in the same report, urges a firm date for a remedy trial: Feb. 4, 2002. It proposes a period of about three months before that for discovery. Government lawyers write that Microsoft’s proposed schedule involves “a needlessly lengthy and convoluted process” that “would simply invite unnecessary delay.” The government agrees that the conduct remedies go beyond the precise monopolistic conduct that Microsoft was found to have engaged in. But it says that case law is clear that in antitrust matters, courts have “large discretion” to come up with remedies that cure the competitive problems in an industry and prevent them from recurring. If Microsoft has its way, the government writes, “it appears likely that these proceedings could last well into 2002, or substantially later. The delay advantages only Microsoft because … it continues to have available to it all of the tools condemned by [the District Court and the appeals court] to continue its illegal maintenance of its monopoly.” The only hint in the joint report that the parties are not totally at odds is their statement that they “will continue to seek settlement of this matter through private discussions, which are ongoing.” An initial status hearing before Kollar-Kotelly, postponed a week because of the terrorism, is set for Sept. 28.

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