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WASHINGTON (AP) — After New Mexico surprised its fellow states by settling its antitrust suit against Microsoft, a legal expert who has followed the case suggested that the software maker is trying to chip away at its pursuers.

“It is a very interesting strategic move by Microsoft to basically try to sort of break up the state coalition by offering to settle,” Howard University law professor Andy Gavil said. “It suggests that Microsoft has got a strategy afoot to try to placate the states by offering to pay attorney’s fees.”

In addition to the attorneys fees — which in the case of New Mexico, was about $100,000 over the life of the four-year case — New Mexico will share in whatever final remedies come at the case’s conclusion.

New Mexico Attorney General Patricia Madrid made the announcement Thursday, a day after Microsoft said it would change the way it licenses its Windows operating system to computer makers.

“I was encouraged that Microsoft made some concessions yesterday — that was a very good first step,” Madrid said.

Microsoft spokesman Vivek Varma said the company “was pleased to have this matter resolved.” Varma added that Microsoft is committed to working with other government officials to resolve the remaining issues in the case.

Varma wouldn’t comment on how the settlement came about, or whether the company is pursuing similar deals with the 17 other states and the District of Columbia that are suing the company.

“We’re just not saying anything on the details on the discussions,” Varma said, “if in fact we are having discussions.”

Justice Department spokeswoman Gina Talamona said the department had no comment.

Madrid said her decision was in the best interest of New Mexicans and that the cost of the suit was too high.

“An important element of this settlement between New Mexico and Microsoft is that my state will receive the benefit of any and all remedies imposed upon Microsoft in the resolution of this lawsuit with any and all of the remaining litigating states and the U.S. Department of Justice,” she said.

Two weeks ago, a federal appeals court ruled that Microsoft had operated as an illegal monopoly and harmed consumers. But the court reversed the trial judge’s order breaking up the company, and sent the case back to a different lower court judge to decide a new penalty.

Shortly after the ruling, both sides hinted a settlement was possible.

Iowa Attorney General Tom Miller, who has led the states’ antitrust fight, said Thursday that Madrid inherited the case from her predecessor over two years ago, but called her a good partner.

“We have the resources and will to proceed without her, especially now fortified by the Court of Appeals’ unanimous decision,” Miller said. He said he was not concerned that more states will follow New Mexico’s move.

Richard Blumenthal, Connecticut’s attorney general, said the other states had no advance warning of Madrid’s decision.

“A settlement by a single state that is working as a member of a multistate team is very uncommon, but the attorney general of New Mexico set forth her reasons for doing it this way, which I respect,” he said.

Madrid said she thought Microsoft’s announcement Wednesday, which let computer manufacturers remove icons for its Internet Explorer Web browser, was a good step for the company. She also said she had reservations about splitting up the company.

“I’ve been thinking about this for some time. I haven’t always been convinced that structural relief was appropriate, I think it’s a difficult remedy and the (appeals) court thought so, too,” she said.

New Mexico is the second state to withdraw from the case. South Carolina pulled out in 1998.

Gavil said the settlement strategy was a good one for Microsoft since any payments would not have much affect on the company financially.

“That’s chump change for Microsoft,” he said.

Copyright 2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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