Further Legal Maneuvering

September 13, 2001

June 28. The United States Court of Appeals for the District of Columbia Circuit found fault with Judge Jackson's conduct of the case and disqualified him from further participation in it. Yet it confirmed his finding that Microsoft has repeatedly violated section 2 of the Sherman Act, and is subject to penalty. It then proposed to return the case to the lower court for reconsideration of Jackson's remedy, which would have broken Microsoft up into (two) smaller firms. Although both sides initially hailed the decision as a victory, Microsoft soon asked the appeals court to reconsider a key portion of its ruling.

July 11. Microsoft announced that computer manufacturers would henceforth be permitted to remove its icons, and to add new ones from rivals like AOL/Time Warner or Real Networks, to the Windows "desktop." Small though this concession might seem, the rigidity of Microsoft's licensing agreements was harmful to the defense during the trial. Microsoft has since abandoned many of the practices deemed "anticompetitive" by the Justice Department.

July 26. Justice filed papers accusing Microsoft of rearguing---in its request to the appeals court---issues already resolved in that court's unanimous (7-0) decision. Justice also reiterated its request that the case be sent immediately to a new trial judge for a remedy curbing Microsoft's anticompetitive behavior.

August 2. The appeals court denied Microsoft's request to reconsider the only part of its June decision that was unfavorable to Microsoft.

August 7. Microsoft asked the Supreme Court to reverse the June finding of the appeals court that the company had repeatedly violated antitrust law, and to expunge all legal and factual findings in the case on the ground that Jackson had made disparaging remarks about the company to members of the press while the trial was still under way. Since the Supreme Court is in recess until October, it is unlikely to respond in time to interfere with the roll-out of Microsoft's new Windows XP system, which incorporates a real-time audio and video player. Pending further action by the courts, Windows XP will debut on October 25.

All this reminds Microsoft's many vocal detractors of the legal maneuvering that led the same court of appeals to lift---on May 12, 1998---the preliminary injunction imposed by Judge Jackson in December 1997 directing Microsoft to decouple Internet Explorer from Windows 95, and to delay shipping Windows 98 until the legality of bundling an Internet browser with a PC operating system could be determined.

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