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American Morning

Some States Disapproving with Microsoft Settlement Reached with Federal Government

Aired November 06, 2001 - 10:18   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BILL HEMMER, CNN ANCHOR: There are also developments this morning in Microsoft's legal dispute with several states.

Steve Young now from Washington, watching that part of the story.

Steve, what's the latest there?

STEVE YOUNG, CNN CORRESPONDENT: Well, Bill, as you know, Microsoft and the federal government reached an agreement last week, Friday, but the states said they wanted more time. They looked at it over the weekend, and the more they look, the more they saw it so laced with loopholes it began to look like Swiss cheese.

This morning at 9:00, very dramatically, we learned there is a three-way donnybrook. One-third of the states say they are willing to sign the agreement, as it was revised. They received a revision at 8:00 a.m. this morning, even though the Justice Department said they wouldn't change a word or a coma. third of the states now say they will sue. They are hell-bent to go ahead and seek improvements on what has been agreeable to the federal government. And the last third of the states say they wanted until 1:00 eastern to take a look at the revised copy to see if they can possibly sign on to it.

It's going to make managing this thing going forward very complicated for the judge, Colleen Collarcatelle (ph). One of the attorneys general, Eliott Spitzer of New York, has indicated at 1:30 he'll be out here with a statement probably indicating if he's in or out of the deal. We believe, well, we know for certain that Massachusetts is one of the states that will not sign. We believe that California is another. There is a lot of speculation. The more that the states looked at the deal, the more they that Microsoft, instead of being subjected to remedies, was sort of getting a reward of the fruits of its monopoly, and it has been found by two courts and two judges to have violated antitrust law in very serious ways.

In fact, in the words of the CEO of Sun Microsystems Scott McNeely, you have a convicted monopolists, and you give him a wet kiss. It's a pretty tart way of putting it, but feelings are very strong. And exactly how this will be resolved, we don't know. It appears the review of whether this agreement is in the national interest will go forward, simultaneous, with further discovery and more witnesses for the states that say, they just can't go along with it -- Bill. HEMMER: Steve, quickly here, thee parts to this. The states, the government and Microsoft all involved. Any reaction from the government as to whether or not they have been surprised by the reaction of some of these states so far?

YOUNG: Well, I talked to Charles James, the assistant attorney general for antitrust, in the elevator on the way down after all of this, and I reminded him on Friday they said that they wouldn't change a word or coma. He looked at me and smiled, and said, well, we are willing to make some changes to try to bring more people in, but that's all he said. He said they will have more comments after 2:00.

HEMMER: Got it, OK. And a deadline later today, as you mentioned, right?

YOUNG: Yes.

HEMMER: OK, Steve, thanks.

Steve Young there live in Washington with the latest on the Microsoft front with us.

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