Microsoft Claims Antitrust Law Abused

Opening its formal appeal of the antitrust decision rendered last June, Microsoft blasts the federal district court for what its lawyers call a misunderstanding of antitrust issues.

U.S. District Judge Thomas Penfield Jackson's ruling to break the software giant into two parts was the result of a proceeding "infected with error," Microsoft's attorneys say. They filed a brief Monday urging the U.S. Appeals Court to reverse Jackson's ruling.

Divesting Microsoft would harm rather than encourage innovation, the company claims.

"Revealing a profound misunderstanding of the antitrust laws, the district court condemned Microsoft's competitive response to the phenomenal growth of the Internet and the emergence of Netscape as a platform competitor," Microsoft argues in the brief. "Far from violating the antitrust laws, Microsoft's conduct was procompetitive, producing enormous consumer benefits."

The brief's attack spreads across a broad legal canvas. It asserts that Jackson's speaking tour after the trial, "together with his improper handling of the litigation," colored public perception of the case, "undermin[ing] all confidence in the integrity of the proceedings."

Microsoft also claims that Windows and Internet Explorer are not separate products "because there are significant benefits to the integrated design of Windows that cannot be duplicated by combining an operating system with a stand-alone Web browser like Navigator."

Feds to Answer in January

The appeals court ordered Microsoft to present its brief on November 27. Also due are a 25-page joint "friend of the court" brief from the Association for Competitive Technology and the Computing Technology Industry Association, and a joint brief from the Association for Objective Law and the Center for the Moral Defense of Capitalism.

Attorneys for the U.S. government and participating states are scheduled to file a reply January 12, 2001.

Jackson ruled on June 7 that Microsoft has used its dominance in operating systems to quash competition. Adopting the proposal of U.S. Department of Justice prosecutors, he ruled Microsoft must be broken up into two separate companies. One company would own the Windows operating system, subject to conduct restrictions. The other would own applications, including Office and Internet Explorer. Jackson's final judgment stayed the breakup until the end of the appeals process. (See "Microsoft Declared a Monopoly" and "Break It Up, Microsoft!")

According to Microsoft's brief, the "so-called 'conduct' remedies--particularly the forced disclosure of Microsoft's intellectual property and regulation of Microsoft's operating system design--are punitive and excessive in relation to the asserted antitrust violations, and these remedies will harm, rather than benefit, consumers." (See PCWorld.com's ongoing coverage of the Microsoft antitrust trial.)