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Senate to review Microsoft
graphic November 28, 2001: 11:08 a.m. ET

Judiciary Committee wants to probe effectiveness of antitrust settlement.
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  • Apple, educators unhappy with Microsoft - Nov. 27, 2001
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  • Microsoft
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    NEW YORK (CNN/Money) - The Senate Judiciary Committee plans to grill state and federal antitrust regulators on whether the proposed Microsoft Corp. antitrust settlement goes far enough in curbing the No. 1 software maker's anticompetitive practices, according to a published report Wednesday.

    The committee has tentatively set Dec. 12 for a hearing at which it plans to question Charles James, the Justice Department's antitrust chief, state officials both for and against the settlement, and a senior Microsoft lawyer or executives, the Wall Street Journal reported, citing Senate aides.

    Microsoft has argued against a hearing since the settlement still is pending. The company also said CEO Steve Ballmer is unlikely to testify, the paper said.

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    Meanwhile, a proposed $1 billion settlement of the private consumer class-action lawsuit against Microsoft could be in jeopardy after a key witness said he had underestimated the amount of damages the world's biggest software maker should pay.

    Keith Leffler, a University of Washington economist testifying on behalf of the settlement, told U.S. District Court Judge J. Frederick Motz at a preliminary hearing Tuesday in Baltimore that his damage estimate should have been $5.15 billion, more than twice the initial $1.2 billion he calculated.

    Under the proposal unveiled last week, Microsoft (MSFT: down $0.59 to $63.15, Research, Estimates) and some plaintiffs agreed the company would provide more than $1 billion worth of software, refurbished personal computers and other resources to more than 16,000 of the nation's poorest schools.

    Motz said he would rule by mid-December on whether to accept or reject the proposed settlement of the case, in which consumers claim Microsoft abused its monopoly power by overcharging for Windows, Office and other software.

    Motz was stunned, but was reassured when lawyers who negotiated the settlement said they didn't use Leffler's figures in calculating how much Microsoft should pay.

    David Tulchin, Microsoft's lead lawyer, said he would make a strong case for the settlement in the next hearing.

    "The settlement is a great settlement for the kids and the country," Tulchin said. "It helps 7 or 8 million kids in the poorest schools get the benefit of technology they wouldn't otherwise have."

    Click here for our Special Report: Justice v. Microsoft

    Separately, Microsoft said Tuesday it has waived its right to a hearing before European regulators in that region's own antitrust case against the company.

    The procedural move does not mean an automatic start to settlement talks with the European Commission, the European Union's executive arm. But it could hasten settlement talks, set to begin Dec. 20.

    Click here for a look at software stocks

    Additionally Tuesday, Connecticut Attorney General Richard Blumenthal said he would not join the U.S. Justice Department and nine other states in the government's antitrust case against the company, saying it "has too many gaps and ambiguities."

    The settlement pact, reached earlier this month, imposes a broad range of restrictions on Microsoft's business practices that would be overseen by an independent on-site, three-member panel of computer experts. graphic


    from staff and wire reports

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