Ouster of Microsoft Settlement Met With Skepticism : Software: Rivals remain doubtful of the government’s ability to halt alleged antitrust practices by the industry leader.
The surprise rejection of an antitrust settlement between Microsoft Corp. and the Department of Justice was greeted cautiously in the computer industry Tuesday, with many of the software giant’s competitors remaining skeptical of the government’s ability to stop allegedly anti-competitive practices by the software giant.
“I think I’ll save the champagne,” said Joseph Gugliemini, president of Apple and IBM joint venture Taligent. “If this turns out to be three years of appeals, who cares? I’m just going to keep my head down and get my product out.”
The original settlement was roundly denounced in the industry as toothless, and many companies petitioned the court--most under the cloak of anonymity--to block the agreement. But few expected Judge Stanley Sporkin to throw out the deal--and some doubted the decision would stick.
“I applaud (Judge Stanley) Sporkin trying to protect the American way and he’s taking a pretty tough stance,” said Scott McNealy, chief executive of Sun Microsystems. “But this may turn out to be interesting and it may not be.”
“I don’t think legal processes are anything to celebrate no matter which way they go,” added Charles Geschke, chief executive of Adobe Systems Inc.
Many lawyers who have followed the case, meanwhile, were amazed by Sporkin’s decision. “This is an extraordinary decision by the judge,” said Penelope Pereovolos, an antitrust lawyer at Morrison & Foerster, a San Francisco law firm. “The trend in the last 20 years has been for antitrust enforcement to be less, not more.”
“You have the Department of Justice on one side with excellent lawyers and Microsoft on the other side with excellent lawyers,” said Pereovolos. “For a judge to come out and say in effect that they don’t know what they are doing is pretty startling.”
Antitrust lawyers have widely argued that Microsoft has more power in certain of its markets than is healthy for competitive markets. However, they have generally agreed that there is little political support for a lengthy legal battle against Microsoft, perceived by many to be American high tech’s golden goose.
Barbara Reeves, a partner specializing in antitrust litigation at Fried Frank Harris Shriver & Jacobson in Los Angeles said: “It is almost unheard of for a judge to reject a government settlment. It’s quite a blow to them. They are the prosecutor, they have announced a settlement they are happy with and the judge has said they are not being the strong watchdog upholding competition that they’re supposed to be.”
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