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States Ask Court To Extend Microsoft Oversight

A group of states led by California asked a federal judge Tuesday to extend court oversight of Microsoft Corp.'s business practices for five more years.

The request comes as the antitrust settlement reached in 2002 between Microsoft, the federal government and 17 states is scheduled to expire Nov. 12. Microsoft has been under the supervision of the U.S. District Court for the District of Columbia for the past five years and has had to report regularly on its compliance with the settlement.

But Stephen Houck, an attorney representing California, said an extension was necessary to ensure that Microsoft's new Vista operating system continues to comply with the consent decree.

"It would be short-sighted to end the final judgements just now," Houck told Judge Colleen Kollar-Kotelly.

California was joined in its request by Connecticut, Iowa, Kansas, Minnesota, Massachusetts and the District of Columbia. Two former members of the so-called "California group," Utah and Florida, did not join the request. Officials from both states have said they believe the consent decree has been effective.

The remaining members of the California group said in court papers that the antitrust settlement had done little to reduce Microsoft's dominant market share in computer operating systems and Web browser software.

Once the consent decree expires in November, "the principal constraint on Micrsoft's ability to abuse its market power will be gone," the states said.

Kollar-Kotelly said she would consider the request, but added that any extension would need to be for an "identifiable purpose." Currently, Microsoft is on track to be in compliance with the antitrust settlement when it expires, Kollar-Kotelly said.

Echoing arguments made by Microsoft in its filings, she also noted that the consent decree's remedies were meant to be narrow and were not necessarily intended to reduce Microsoft's market share in any particular product.

The antitrust settlement barred Microsoft from certain anticompetitive behaviors, such as seeking deals with computer makers to exclude competing software, and sought to ensure that Microsoft couldn't use its operating system monopoly to stifle competition.

Jack Evans, a spokesman for Microsoft, said "we're a bit surprised that a few states are now requesting an extension," given that they criticized the settlement as ineffective in court filings last month.

An aspect of the consent decree dealing with software for computer servers was extended last year to November 2009. California also said it will request that that provision be extended for three more years, to 2012.

The Justice Department, meanwhile, said in court filings that it believes the antitrust settlement has been effective in encouraging the development of new software, such as competing Web browsers by Apple Inc. and Mozilla.

Aaron Hoag, a department lawyer, told Kollar-Kotelly that Vista has already been tested by a technical committee and shouldn't pose future antitrust problems.

California agreed to file its request in writing by Oct. 15. The court still plans to hold a final hearing on Microsoft's compliance with the consent decree Nov. 6.

Microsoft shares rose 35 cents to $28.83 in midday trading.