Microsoft Appeal Sent to High Court; Sanctions on Hold
U.S. District Judge Thomas Penfield Jackson referred the landmark Microsoft antitrust case to the Supreme Court on Wednesday, while also delaying tough restrictions on the software giant’s business practices until a higher court can review his punishment.
Acting under a rarely used law that permits urgent antitrust disputes to leapfrog the U.S. Court of Appeals, Jackson asked the high court for “immediate consideration” of the Microsoft case.
The Supreme Court, whose fall case calendar is already booked through the end of November, could choose to accept briefs on the antitrust dispute as early as next month or require that the case take the traditional step of judicial review through the Court of Appeals.
The Justice Department applauded Jackson’s order to fast-track the Microsoft antitrust case.
“We are very pleased with the court’s decision to place the appeal directly in the Supreme Court,” the department said in a statement. “This decision affirms the department’s position that a quick and effective remedy is necessary to resolve this significant case.”
Microsoft spokesman Mark Murray said, “The decision to certify the case for potential direct appeal to the Supreme Court was widely expected, but we’re very pleased the court has stayed the judgment pending appeal.”
On June 7 Jackson ordered Microsoft broken up into two companies for having violated antitrust laws by abusing its monopoly in personal computer operating systems. He immediately suspended the breakup, though, until the appeals process was completed.
Two weeks ago Jackson also ordered strict limits on Microsoft’s business practices to take effect Sept. 5. One remedy included ordering Microsoft to open its Windows operating system code to rival software developers and computer markers to ensure better compatibility with rival products. But Jackson suspended these remedies Tuesday, which surprised some observers.
Jackson’s remedies also included forcing Microsoft to offer the same licensing terms for its products to all computer makers, whether they promote Microsoft’s products exclusively or offer competing software, as well as separating its Internet Explorer from its Windows operation system so the program can be purchased separately.
Indeed, some Microsoft supporters said the company had reason to rejoice at Jackson delaying these sanctions.
“It’s a great relief for Microsoft that these remedies are being stayed for the time being. This gives them a little bit of breathing room,” said Wayne Crews, director of regulation and competition policy at the Competitive Enterprise Institute, a Washington think tank that has been supportive of Microsoft.
Several legal analysts saw Jackson’s decision to delay sanctions as an effort to encourage the Supreme Court to take the Microsoft case because the high court would no longer be faced with resolving the issue of whether punishment should be delayed before getting to the merits of the case.
“I think that’s maybe one motivation,” said Robert Lande, a law professor at the University of Baltimore. But Lande also speculated that Jackson may have been chastened by the ultra-conservative seven-judge panel set up by the U.S. Court of Appeals in Washington last week to hear any Microsoft appeal, unless the Supreme Court stepped in.
“I think Jackson figured there was a 99% chance the [appeals] court would issue a stay” so he did it himself, Lande said.
Microsoft will have until Aug. 12 to file an appeal from Jackson’s ruling if the Supreme Court decides not to expedite the case.
The fast-changing software industry, as well as the arrival of a new presidential administration next year, has fueled a high-stakes battle between Microsoft and the government over which court will get the first crack at reviewing Jackson’s ruling.
Based on Jackson’s earlier ruling, Microsoft faced being split into two companies. One, a Windows computer operating-system business to market the basic software program that allows most computers to run; and a second applications company to develop subsidiary programs, from word processing to the Internet Explorer Web browser.
The government fears that lengthy appeals of Jackson’s rulings might blunt the impact of any final sanctions and render moot the complex technology issues raised by the dispute. Microsoft, meanwhile, hopes that a new political administration might reassess the government’s position and settle or drop the case.
With one eye on the calendar, the software giant is trying to push the antitrust case before the appeals court, rather than the Supreme Court. The appeals panel ruled in Microsoft’s favor on a related antitrust issue two years ago and probably would take at least a year or more to review the case.
The Justice Department and 17 states and the District of Columbia, meanwhile, want any appeal fast-tracked to the Supreme Court.
Some legal experts doubt that the Supreme Court will consider the Microsoft case without the benefit of review by the appeals court. The high court is said to prefer the benefit of legal analysis from an appeals court, as opposed to sorting out a long and complicated lower court trial record. And a source close to the high court who met this week with one Supreme Court justice said the jurist expressed skepticism about taking the Microsoft case on an expedited basis.
Other antitrust lawyers say, however, that the Microsoft case is precisely what federal lawmakers had in mind when they passed the Expediting Act in 1974. The statute has been used only twice, both times in an antitrust case against AT&T.;
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Reuters was used in compiling this report.
