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. Last Updated: 07/27/2016

Microsoft: Windows In Danger

WASHINGTON -- Microsoft Corp. plans to argue in court hearings next week that if antitrust sanctions sought by state prosecutors are granted, the company would be forced to pull its latest Windows computer operating systems off the market and be unable to develop new systems.

In court filings late Friday, the company said the recently released consumer operating system, Windows XP, and the more business-oriented Windows 2000 system, could not be redesigned to satisfy state demands that they be made available in separate versions with and without key programs such as the Internet Explorer Web browser.

The states, according to a filing Friday, plan to argue that Microsoft's claims are a "doomsday defense" and that such separation is not only feasible but essential to remedying Microsoft's antitrust violations and restoring software competition.

The filings provide the first formal glimpse into how the two sides plan to approach the upcoming hearings, which pose the most serious threat to Microsoft's business practices since federal prosecutors unsuccessfully sought to break the company apart two years ago.

In November, Microsoft and the Justice Department agreed on a proposed settlement that restricts the software company's conduct. Although several states that were part of the prosecution signed onto the deal, others found the agreement weak and decided to pursue tougher sanctions.

The result is that the nearly 4-year-old case is playing out in a complex, two-track phase that is without legal precedent. Last summer, a federal appeals court ruled that several Microsoft business practices were designed to illegally preserve its monopoly in desktop computing and crush competition.

On Wednesday, District Court Judge Colleen Kollar-Kotelly plans a hearing to help her decide whether to approve the settlement deal as being in the public interest. Next week, however, the same judge will begin hearings with the states that are seeking the stronger measures.