Microsoft petitions court for rehearing

Microsoft Corp. has asked a U.S. appeals court to reconsider the issue of whether the "commingling" of its Internet Explorer (IE) browser with software code in the Windows 98 operating system violated federal antitrust law.

The software maker filed a petition Wednesday seeking a rehearing on the matter, arguing that "critical evidence was overlooked -- or misinterpreted -- on the technical question of whether Microsoft 'commingled' software code specific to Web browsing with software code used for other purposes in certain files in Windows 98." The U.S. Court of Appeals for the District of Columbia Circuit in a ruling last month accepted a lower court conclusion that the company had "commingled" the browser with the operating system in violation of the Sherman Antitrust Act.

The court filing is the latest in the ongoing antitrust lawsuit filed more than three years ago against Microsoft by the U.S. Department of Justice and 19 state attorneys general. The attorney general of New Mexico recently settled with Microsoft. A day later, the DOJ filed a request that the Appeals Court expedite sending the case back to the trial court for reconsideration. The Appeals Court in a June 28 ruling agreed with the District Court that Microsoft has illegally used its operating system monopoly to squelch competitors. However, the appellate court found that District Court Judge Thomas Penfield Jackson had behaved inappropriately in making public comments and in granting interviews to reporters when he still was overseeing the case and before he had issued the remedies to be imposed on Microsoft. The appellate court also tossed out Jackson's order that Microsoft be split into two separate companies -- one focused on operating systems and the other on applications.

The remedies issue is to be reconsidered by a different District Court judge. The Appeals Court also sent the issue of "tying" Windows to IE back to the lower court for reconsideration, offering guidance to the trial judge as to what should be considered in that matter and what each side must prove. The court further found that the government did not prove its claim that Microsoft attempted to create a monopoly in Web browsers.

The court's decision to uphold the District Court on commingling "is important because it might be read to suggest that OEMs (original equipment manufacturers) should be given the option of removing the software code in Windows 98 (if any) that is specific to Web browsing," Microsoft said in Wednesday's court document. "The Government, however, did not seek such relief on appeal."

Since the court ruling, Microsoft has announced that it will include IE in the Add/Remove Programs utility. That action means that "the problem will be fully addressed," Microsoft said.

But even if government plaintiffs could show that software code specific to Web browsing appears in Windows 98 files used for other purposes, "any notion that OEMs should be allowed to remove such software code -- as opposed to removing end-user access to Internet Explorer -- runs counter to the district court's finding that Microsoft's inclusion of Web browsing functionality in Windows benefits consumers," the court document said.

The document cites specific testimony from witnesses in the case and contends that those witnesses did not support Judge Jackson's "finding of fact" that Microsoft had commingled IE code specifically needed for Web browsing with Windows 98 code that is necessary for other purposes. One government witness admitted in court that he never saw the source code in question, while Microsoft witnesses denied that the company had "commingled" code.

"Rather, in organizing software code into files, Microsoft placed related functions close to one another," the court document said. "That improved the performance of the operating system by eliminating the overhead inherent in copying large numbers of disparate files from the computer's hard disk into active memory in order to perform a given task."

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