Microsoft told it's too slow in carrying out antitrust pact

WASHINGTON, D.C. — A federal judge said she is concerned about delays in implementing a key component of Microsoft's 2001 antitrust settlement with the Bush administration and a group of states.

U.S. District Judge Colleen Kollar-Kotelly also scolded the company over a provision in a draft proposal with the makers of digital music players that would have resulted in only Windows Media Player software being shipped with their products. Microsoft abandoned the idea after a competitor protested.

The judge's comments came Wednesday in a quarterly status conference before the judge to review progress in implementing the settlement of the landmark antitrust case.

In reviewing one of the settlement's main elements, Kollar-Kotelly questioned the pace of Microsoft's efforts to develop tools that would help other companies create smooth-running programs for the Windows operating system. Microsoft and government lawyers last week said the project, dubbed Troika, won't be completed until at least October 2006, nine months behind a schedule set earlier this year.

"This needs to get done," Kollar-Kotelly told Microsoft lawyer Rick Rule. "If it's a question of resources, put them in."

Rule told Kollar-Kotelly the project has proved more complicated than envisioned. He said Microsoft has the equivalent of 30 full-time people working on Troika, which also will develop a program to analyze the adequacy of technical documentation provided to developers.

"I think we are several-fold above what we initially thought was required," Rule said.

Stephen Houck, a lawyer representing California and other states that sued Microsoft, called the delay on Troika "the principal bone of contention" between the litigants.

Microsoft has provided "absolutely nothing in terms of deliverables to the licensees to help them develop their products," he said.

On the issue of the music players, Kollar-Kotelly demanded an explanation from Microsoft's lawyers and told them, "This should not be happening."

Legal and industry experts said Microsoft's Windows Media Player demands probably would have violated the antitrust settlement.

The judge said Microsoft's music-player proposal — even though it was abandoned 10 days later — "maybe indicates a chink in the compliance process."

The disputed plan, part of a marketing campaign known as "easy start," would have precluded music-player makers from distributing to consumers music software other than Windows Media Player, in exchange for Microsoft-supplied CDs.

Rule blamed the proposal on a newly hired, "lower-level business person" who did not understand the company's obligations under the antitrust settlement. The agreement constrains Microsoft's business practices through late 2007.

Rule said Microsoft regrets the proposal ever was sent to the manufacturers and that the company was "looking at it to make sure this is a lesson learned."

A Justice Department lawyer, Renata Hesse, said the government will discuss with Microsoft its legal training for employees about antitrust rules. The government previously said the incident was "unfortunate" but said lawyers decided to drop it because Microsoft pulled back.

Kollar-Kotelly ordered both parties to file another progress report by Nov. 18 and scheduled another status conference for Nov. 30.

Material from Bloomberg News and The Associated Press is included in this report.

Accord won't end

probe, group says

SEOUL, South Korea — South Korea's antitrust watchdog said Wednesday it won't drop its investigation into allegations Microsoft engaged in unfair trade practices even if the U.S. software company reaches an accord with the South Korean company that first brought the complaint.

"We have been promoting competition in markets and enhancing consumer benefits to strengthen the national economy," the Fair Trade Commission said in a statement. "In this respect, we will continue to assess the Microsoft case regardless of whether it and Daum Communications reach an agreement."

The commission was responding to a report Wednesday in the Seoul Economic Daily that Microsoft and Daum are trying to work out a settlement and that industry expectations for one are high. Microsoft representatives in Seoul couldn't immediately be reached for comment.

Daum, a South Korean Internet portal, filed a complaint to the commission in 2001 alleging that Microsoft violated trade rules by tying its instant-messenger software to Windows.

The Associated Press