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Microsoft case on hiatus
Following nine weeks of hearings, proceeding on hold until mid-June. Final decision expected in July
May 17, 2002: 6:16 PM EDT

NEW YORK (CNN/Money) - After weeks of testimony from high-profile tech executives, including Microsoft chairman Bill Gates, hearings in the latest phase of his company's landmark antitrust trial quietly came to a close Friday.

Closing arguments from each side have been scheduled for mid-June. A final decision from the judge currently presiding over the case is not expected until mid-July at the earliest.

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The federal court system has determined that Microsoft has a monopoly in the market for computer operating systems and has engaged in anti-competitive business practices that violate U.S. antitrust laws.

The latest round of hearings were part of the "remedy phase" of the trial, intended to determine what restrictions and requirements the court should impose on Microsoft's business practices to prevent it from further abusing its monopoly power.

The U.S. Department of Justice filed its antitrust suit against Microsoft in 1997 and reached a settlement with the company last November. Nine of the states that had joined the Justice Department in its case against the company have signed off on that settlement.

But nine other states -- California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah and West Virginia, along with the District of Columbia -- broke with the Justice Department's remedy proposal, arguing that it wasn't strong enough.

U.S. District Judge Colleen Kollar-Kotelly will decide what remedies are appropriate based on testimony given during the hearings, which began nine weeks ago.

The Justice Department settlement would impose a broad range of restrictions on Microsoft's business practices, including a provision barring Microsoft from entering into licensing agreements with PC manufacturers that restrict them from working with other software developers, a practice referred to as "exclusive dealing."

It would also require Microsoft to provide other software makers access to elements of its Windows source code, called application programming interfaces, or APIs, which are necessary for them to make their applications work under the Windows operating system.

However, it does not impose any restrictions on the features Microsoft is allowed to incorporate into its Windows operating system, which was at the heart of the government's case against the company.

The non-settling states, among other things, want the court to force Microsoft to offer a stripped-down version of its Windows operating system that enables PC makers to remove features such as Web browsers and digital media players.

They also want to force Microsoft to reveal more of its Windows source code than is proposed under the Justice Department's plan.

Attorneys for Microsoft argued that such provisions are technically infeasible and would give Microsoft's competitors an unfair advantage. And they put in the stand a series of witnesses, including company chairman and co-founder Bill Gates.

During his three days of testimony, Gates said that offering versions of Windows without the other software would be impossible because the programs are so tightly woven into the operating system that even its designers can't discern where one begins and the other ends.

He also said that, the way he sees it, one of the non-settling states' central objectives is "providing Microsoft's technology to its competitors so they can build 'functional equivalents' of our products now, and match all our future innovations for 10 years."

For their part, the states called a series of witnesses, executives of some companies that compete against Microsoft, to support their argument that a stripped-down version of Windows is technically possible and that a harsher set of remedies is necessary in order to prevent Microsoft from unfairly squelching competition in the future.

Microsoft formally rested its defense on Wednesday, and Judge Kollar-Kotelly heard arguments on a raft of motions from both sides -- including Microsoft's motion to dismiss the non-settling states' case outright -- on Thursday and Friday.

The judge did not indicate when she would rule on those motions.

Closing arguments for this phase of the case have been scheduled for June 19, and Judge Kollar-Kotelly is not expected to return her decision for at least several weeks after that.

When she does hand down a final set of remedies, each side then has the option to appeal her decision, which could push the case out well into 2003.  Top of page