Seattle giant stands up to California and Iowa...Microsoft has hit back at five US states who are demanding increased restrictions on the sales of its software. Of the nine who rejected the original settlement, five are still unhappy with what is being proposed. Those states, which include California and Iowa, want to force Microsoft to sell Windows and Internet Explorer separately. However, Microsoft has rejected the claim saying the states do not have the legal authority to demand such a scenario. The Redmond giant also argued yesterday there was no evidence that people living in those states were being harmed by its current business practices.