Chipmaker says Microsoft antitrust sanctions would hurt consumers

<br>WASHINGTON (AP) _ The head of microprocessor maker Advanced Micro Devices, the first person to testify on behalf of Microsoft Corp. in its antitrust case, says consumers and the industry benefit from

Tuesday, April 16th 2002, 12:00 am

By: News On 6

WASHINGTON (AP) _ The head of microprocessor maker Advanced Micro Devices, the first person to testify on behalf of Microsoft Corp. in its antitrust case, says consumers and the industry benefit from having a standard version of Windows.

W.J. ``Jerry'' Sanders, AMD's chairman, says that if nine states were to persuade a court to force Microsoft to release a ``modular'' version of Windows, both hardware and software makers would have trouble releasing new products.

The states say that the stripped-down Windows, in which computer makers would be able to remove key portions and substitute rival software, such as a Web browser or instant messaging program, would provide more consumer choice and healthy competition.

Sanders, scheduled to testify Tuesday, is the first of about 30 witnesses for Microsoft over the next several weeks.

The states also want to make Microsoft release the software blueprints of its Internet Explorer Web browser and let other companies translate its Office business software to other operating systems.

The federal government and nine other states settled their antitrust case against Microsoft last year for lesser penalties.

The original judge in the case, Thomas Penfield Jackson, ordered Microsoft broken into two companies after concluding that it illegally stifled competitors. An appeals court reversed the breakup order and appointed Kollar-Kotelly to determine a new punishment.

The Justice Department lent some support to the states Monday, saying that despite the federal settlement the states should be allowed to continue with their case.

U.S. District Judge Colleen Kollar-Kotelly, who is overseeing the current penalty hearing, invited the federal government to give their view on whether individual states have the legal authority to seek penalties that would apply to the entire nation.

The department made clear that it only supports the states as a matter of law. Justice lawyers said the states' proposals would ``harm consumers, retard competition (and) chill innovation.''

``But under existing law, the non-settling States may pursue relief in their separate case,'' Justice lawyers wrote. ``It is the court's exercise of equitable discretion that must provide protection from these dangers.''

Microsoft argues that the states do not have that right, and have asked Kollar-Kotelly to dismiss the suit.

Deciding to support the states puts the government into an odd situation of effectively supporting the states' right to criticize the federal settlement reached with Microsoft last year.

That settlement, which has yet to be approved, has been attacked several times a day in Kollar-Kotelly's courtroom by the states' witnesses who say it is too weak to restore fair competition and keep Microsoft from strangling its competitors.

If the government sided with Microsoft, it would have opened a potentially explosive constitutional battle. Over 20 states, including those that have settled with Microsoft and others not involved in the case, filed papers supporting the states' right to sue.

Microsoft asked Kollar-Kotelly on Monday to immediately dismiss the states' case, alleging that the states have not proven that the penalties are warranted. The judge did not indicate when she would rule on the request.

States that rejected the government's settlement with Microsoft and are continuing to pursue the antitrust case are Iowa, Utah, Massachusetts, Connecticut, California, Kansas, Florida, Minnesota and West Virginia, along with the District of Columbia.