Blizzard Doesn't Bury Antitrust Brief

WASHINGTON (01/26/2000) - On a day when the capital was paralyzed by a blizzard so severe that postal workers were stayed from the completion of their appointed rounds, the U.S. Department of Justice, the District of Columbia and the 19 states locked in an antitrust battle with Microsoft Corp. posted a scheduled filing on the department's Web site.

The government's second "proposed conclusions of law" is the latest salvo in a case it is widely perceived as winning. In November, U.S. District Judge Thomas Penfield Jackson issued scathing "findings of fact" that officially labeled Microsoft a monopolist that ruthlessly crushed threats to its Windows operating system monopoly. In a December filing, and again Tuesday, the government has charged that Microsoft's conduct violated the Sherman Antitrust Act in at least four different ways.

The new filing came late in a day when over a foot of snow blanketed the city, shutting down both the department and the federal courthouse where Judge Jackson is considering the landmark case. Earlier Tuesday, a department representative said that government lawyers planned to leave the brief in a special drop box at the courthouse.

In a filing Jan. 18, Microsoft chose to rebut the government by focusing on the original issue in the case - whether the software giant illegally bolted its Internet Explorer Web browser to Windows to forestall competition from Netscape. The software giant waited until the end of that brief to attempt to counter the government's monopoly claims, which Jackson upheld in his findings, thus exposing the software giant to dozens of class action lawsuits and a potential court-ordered breakup. Microsoft answered the monopoly charge in part by arguing that the "relevant market" of Intel-based personal computers was drawn too narrowly.

"Microsoft treats as an afterthought both the court's core finding that Microsoft has monopoly power and the unifying theme of the court's numerous findings on Microsoft's conduct," according to the government brief filed Tuesday. "Microsoft's approach not only disregards and fragments this court's findings but improperly evades the substantive importance of the finding of monopoly power." The brief went on to call Microsoft's counter-arguments on the question of monopoly power "a series of potshots" with no legal grounding.

The government reiterated its allegations that Microsoft unlawfully contracted with computer makers, Internet service providers and other companies to thwart competition to Windows.

"We believe the government is misreading the law and misinterpreting the reality of our industry," says Microsoft spokesman Mark Murray. "There are a number of places where the document stretches the law and stretches the facts to try to push their case uphill."

Microsoft is scheduled to file an answering brief Feb. 1, along with four "friends of the court" who will file their own briefs on behalf of Microsoft, the Department of Justice, the states and the District of Columbia, and Jackson. So far, only Jackson has publicly designated his friend of the court, Harvard law professor Lawrence Lessig (a regular contributor to The Industry Standard) who will write on the subject of technological tying.

Settlement talks are ongoing in Chicago, mediated by Richard Posner, chief judge of the 7th Circuit U.S. Court of Appeals at Jackson's request. The sides are largely silent about the talks, but are said to remain far apart on settlement terms. The Justice Department is reportedly pushing for a breakup of the company, a solution fiercely resisted by Microsoft.

Another round of oral arguments is scheduled for Feb. 22. Barring a settlement in the case, Jackson is expected to issue his final ruling by May. Should that ruling go against Microsoft, Jackson may schedule another round of oral arguments, and perhaps even witness testimony, before ordering a "remedy" in the case.

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