Feds, States Ready to Hit Microsoft?

A coordinated antitrust action may come as early as next week, ahead of the expected release of Windows 98.

WASHINGTON - The federal government and some states could file coordinated new antitrust charges against Microsoft as early as next week, well before the expected release of Windows 98, sources said Tuesday.

While the charges would be filed separately by the states and the Justice Department, staff attorneys at both levels have been discussing the best way to work together.

"Within a week there could be a coordinated filing," said one source. But matters are still at the staff level, with sign-offs needed from top officials, another source said.

The Justice Department had no comment.

There has been speculation for months about possible broad new charges against Microsoft and whether they would be brought before the release of the company's updated operating system, which is expected to be released to manufacturers in mid-May and is set for public release in June.

Only a few weeks ago, 11 state attorneys general were preparing to file an antitrust case against Microsoft, in part as a way to spur the Justice Department to action.

Since then, the states and the federal government have agreed that no jurisdiction should roll over another, those familiar with the case said.

West Virginia has joined the 11 states that were in on the case earlier: California, Connecticut, Florida, Illinois, Iowa, Massachusetts, Minnesota, New York, South Carolina, Texas, and Wisconsin.

The Justice Department went to court last year against Microsoft, charging that it had violated a 1995 agreement that was supposed to help increase competition in the software industry.

A federal appeals court heard an appeal on several aspects of that case last week. One of the judges observed that the case could fall into a "time warp" because it involves Windows 95, which is about to be replaced by Windows 98.

Experts on all sides have said repeatedly that a new case would be far more difficult to prove and win. All the Justice Department had to prove in the existing case was that Microsoft violated an existing contract.

A new case would require proof of violations of the Sherman antitrust law, which can be complex, experts said.

Some analysts have said the Justice Department needs to act before Windows 98 comes out, but others say it would make little difference.