The US Department of Justice (DoJ) and the nine states who have agreed to settle with Microsoft have officially parted from the remaining nine states that are pressing for stricter penalties.

District court judge Colleen Kollar-Kotelly issued an order to "deconsolidate" the federal case headed by the DoJ and the case that includes plaintiffs who are not participating in the settlement. Nine states and the District of Columbia have rejected the proposed settlement.

The separate actions were first consolidated in May 1998. Judge Thomas Penfield Jackson concluded that the cases were "entirely parallel," and the order would avoid duplicating the legal process.

He later ruled that Microsoft illegally used its monopoly power in the market for desktop operating systems to hurt competitors in other industries, such as the Internet browser market. A Federal Appeals Court upheld the lower court ruling in June 2001 but sent the case back to a trial judge to come up with a new set of remedies.

Nine states and the DOJ found settlement with Microsoft in the case. Nine more continue to press for stricter penalties. The dissident nine states include: Iowa, California, Massachusetts, Connecticut, Florida, Kansas, Minnesota, West Virginia and Utah, as well as the District of Columbia. Remedy hearings in that case are scheduled to begin on March 11.