Judge Opens Microsoft to Broader Trial
In a major setback for Microsoft Corp., a federal judge on Thursday kept the door open for the government to pursue a broader case against the software giant for allegedly engaging in a wide range of monopolistic practices during the last decade.
District Court Judge Thomas Penfield Jackson denied Microsoft’s request to limit the scope of the upcoming trial to a narrow set of issues laid out in the initial complaint filed by the Department of Justice and 20 state attorneys general in May. Instead, Jackson said he will rule on a case-by-case basis as to what evidence could be introduced.
Experts said the decision gives the government important leeway to pursue fresh allegations it has raised in recent weeks as part of a new legal strategy in what is viewed as the most important antitrust case since the breakup of AT&T; in 1984.
Microsoft is being charged not only with specific acts included in the government’s original complaint--mostly related to its Internet software war with Netscape Communications Corp.--but also with engaging in a “broad pattern of anti-competitive behavior” dating to 1991, including attempts to kill competing products being developed by industry giants such as Intel Corp., Apple Computer Inc. and Sun Microsystems Inc.
The government’s case against Microsoft is considered hugely important because it could determine who, if anyone, controls the infrastructure of the Information Age.
If the government succeeded in proving the broader charges, experts say, the judge would be more likely to slap tough sanctions on the company designed to halt that pattern of behavior.
“If you look at the allegations as they currently stand, there are now a dozen or more different things the Justice Department has brought up,” said Herb Hovenkamp, a University of Iowa law professor who briefly advised some of the states participating in the antitrust suit. “If Microsoft goes to trial and loses on any one or two of those things, it could be devastating.”
Hovenkamp said that the judge could go so far as to break up Microsoft and that the case would open the door for subsequent private antitrust suits seeking monetary damages.
San Francisco attorney Sam Miller, who headed an earlier Justice Department investigation of Microsoft, said: “If the judge finds Microsoft guilty, he has tremendous power to fashion wide-ranging remedies. He can fashion relief to undo the impact of anti-competitive practices in the past.”
For the government, the downside of a broader case is the potential for delays in the trial, which is scheduled to begin Oct. 15. Although many observers believe that Judge Jackson is sympathetic to the government’s arguments, the appellate courts have reversed him on several occasions, suggesting that the government could have to go to the Supreme Court to win its case.
That could mean a lengthy lawsuit that would give Microsoft more time in the market to establish its product line as the industry standard and render moot many of the issues raised by the government. Such lengthy trials are a risk to the government because they strain the Justice Department’s limited resources and seldom receive broad public support.
The case has already been delayed from its original Sept. 9 start date, and Microsoft is expected to request further delays to defend itself against the additional charges. Microsoft is also expected to continue to fight government efforts to introduce new evidence.
“We’ve got a limited amount of time left, we’ve got a lot of work to do, and it would be easier for everybody if we don’t have to chase down what turn out to be ghosts,” Microsoft attorney John Warden argued Thursday.
The Justice Department’s original complaint focused on three allegations: Microsoft signed exclusionary licensing agreements with Internet service and content providers designed to hurt Netscape’s Navigator Web browser; the company forced computer makers who license the Windows 95 operating system to also distribute its Internet Explorer browser; and Microsoft illegally controlled the way personal computer makers present its Windows software on computer screens.
But in recent weeks, the government has added allegations that Microsoft pressured Intel, Apple and RealNetworks Inc. to drop software development efforts that conflicted with Microsoft’s own plans, and that it set out to deliberately undercut Sun’s fledgling Java software to protect its Windows monopoly.
The Justice Department says that it hasn’t broadened its case and that the new evidence it has introduced will be used to show its central claim that Microsoft has unlawfully maintained its operating system monopoly through a series of exclusionary acts in other markets as it has in browsers.
But the department has sought depositions from seemingly far-removed industry executives such as Bristol Technology Inc. President Keith Blackwell, whose company makes software development tools for companies to adapt Windows NT programs to the Unix computer operating system, which is an area of the computer industry that Microsoft does not dominate.
The government also plans to reexamine allegations reviewed in earlier investigations by both the Federal Trade Commission and the Justice Department.
Among the evidence the government has put forward is a Sept. 30, 1991, e-mail from David Cole, then head of Microsoft’s Windows development team, appearing to endorse a plan to “put competitors on a treadmill” by inserting a bug that “would surely crash” Windows if it were installed on top of another disk operating system instead of Microsoft’s MS-DOS system.
“The case is mutating into an old-style IBM case. Big is bad,” said Rick Rule, a legal consultant to Microsoft. “Every new allegation is being loaded into the case.”
