States Join U.S. Government to Press Antitrust Case Against Microsoft
Microsoft Corp. violated the Sherman Antitrust Act as well as state antitrust statutes as it expanded its monopoly in the computer software market, according to legal briefs filed Monday by the Justice Department and 19 states in the landmark antitrust trial.
The federal government’s conclusions of law were outlined in two separate legal briefs filed in U.S. District Court in Washington. At the same time, Microsoft and government lawyers met privately 600 miles away in Chicago to try to settle their historic antitrust case out of court.
The states joined the Justice Department in the main 57-page legal brief and argued that Microsoft violated Section 1 of the Sherman Act by “unlawfully maintaining its monopoly” in personal computer operating systems. They also maintained that Microsoft violated Section 2 of the Sherman Act by attempting to monopolize the market for software to browse the Internet and by “unlawfully tying a Web browser to its [Windows] operating system.”
The states also filed a separate 47-page brief saying Microsoft’s alleged attempt to monopolize the Web browser market by its exclusive deals with Internet content and service providers, among other acts, violated antitrust laws in the District of Columbia, California and 18 other states.
The government’s filings, which will be followed by two Microsoft legal briefs next month, are to be reviewed by presiding U.S. District Court Judge Thomas Penfield Jackson before he reaches his final verdict in the case. Jackson’s final ruling in the Microsoft case should come around March.
Microsoft spokesman Mark Murray was quick to dispute the government’s claims Monday, contending they won’t withstand judicial scrutiny and aren’t supported by the factual findings released by Jackson last month.
“The judge has dismissed these arguments completely,” Murray said. He cited a passage in Jackson’s 207-page findings of facts stating that “there is insufficient evidence to find that the requirements that Microsoft sought to impose with respect to the use of Microsoft-specific browsing technologies had any discernible, deleterious impact on” rival Internet Web browsers.
The company spokesman also said that Jackson’s findings noted that Microsoft’s chances of monopolizing the Internet Web browsers market have been undercut by America Online Inc.’s purchase of Microsoft browser rival Netscape Communications Corp.
Microsoft also issued a statement Monday, saying: “While we disagree with the government’s arguments, we look forward to presenting our conclusions of law to the court as this process continues.”
So far in the landmark antitrust case against software giant Microsoft, the government has appeared to most observers to be holding the upper hand. Jackson largely sided with the government in issuing his findings of fact on Nov. 5 that condemned Microsoft’s conduct and declared the company a predatory monopoly that had used its power to stifle innovation by rivals.
But experts say government lawyers must be careful in this final phase of the 14-month-long trial not to overplay their hand. Even government lawyers acknowledge that they must make certain their legal conclusion can withstand the scrutiny of a likely appeal.
That’s because while Judge Jackson’s findings of fact are virtually invulnerable to challenge, an appeals court could pick apart the conclusions of law that Jackson must reach, if the government and Microsoft don’t settle their differences.
“This document has to be rugged in the sense that it will have to withstand hits from the reviewing courts,” said William E. Kovacic, an antitrust expert and law professor at George Washington University.
Despite the separate state and federal filings Monday, government lawyers continue to be unified in their pursuit of Microsoft, said Wayne Klein, a Utah assistant attorney, who is handling the Microsoft case for that state.
Meanwhile, lawyers for the Justice Department and the states met in Chicago for a second time with federal Judge Richard A. Posner, who Jackson appointed last month to mediate an out-of-court settlement.
Shares of Microsoft declined Monday 69 cents to close at $95.44 in Nasdaq trading.
