PublishedNovember 11, 2001

Settlement or Sellout?

Washington, DC- The Computer & Communications Industry Association (CCIA) released the following statement in response to press reports indicating the Justice Department on the verge of forfeiting an effective remedy in the Microsoft antitrust trial:

· The current settlement proposal will do little to protect consumers, competition, entrepreneurs, and innovation. It is clear the proposal will not deter Microsoft’s illegal behavior or prevent it from leveraging its operating system monopoly into markets for other products and services. For instance, with Windows XP Microsoft now intends to shift its monopoly to the Internet.

· The process for arriving at this settlement is convoluted at best. Why are the State Attorneys General being asked to sign onto a deal — in what is generally considered one of the largest antitrust case in decades — with only hours to evaluate and consider the terms? This is a historic case and all sides have felt the need for input on technology-based issues for 4 years while this case has been litigated. The public needs a chance to see and evaluate the proposal and not “buy a pig in the poke.”

· Why is the Justice Department settling this case for so little? The Government’s case was largely accepted by the District Court and unanimously upheld by the D.C. Circuit. On what basis is the Department of Justice now willing to settle on terms less favorable than those set forth in settlement discussions that occurred prior to its overwhelming victories in the courtroom?

“To say we are troubled by the published accounts indicating that the Justice Department is selling out consumers, competition and innovation would be an understatement,” said Ed Black, CCIA President & CEO. He continued, “Microsoft has been declared an illegal monopolist by nine Federal judges, including one who determined it was necessary to break up the company. They should be held accountable for their unlawful actions, and prevented from further abusing their monopoly position. The provisions of the proposed settlement are an invitation to further abuse. Microsoft will be free to continue their illegal practices, only now the Justice Department will have been complicit in this activity.

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