MS/DOJ - Industry reaction to Microsoft ruling mixed

Many of the largest IT vendors declined to comment Thursday on a federal appeals court ruling in Microsoft's antitrust case, although a few industry trade groups and smaller IT firms were eager to talk about how the ruling might affect the technology industry moving forward.

The U.S. Court of Appeals for the District of Columbia Circuit sent back to a lower court U.S. District Court Judge Thomas Penfield Jackson's verdict in the government's landmark antitrust case against Microsoft. The court vacated Jackson's order that the company should be broken in two parts to curb its monopolistic behavior, but upheld the finding that Microsoft illegally tried to maintain a monopoly in the market for PC operating systems.

Microsoft rivals including database vendor Oracle Corp. and media giant AOL Time Warner Inc. declined to comment on the decision, although they have been vocal about the proceedings until now. Similarly, Microsoft partners including Dell Computer Corp., Compaq Computer Corp. and Hewlett-Packard Co. also refused to voice their opinion.

Microsoft rival Red Hat Inc., which distributes a version the Linux operating system, called the ruling a victory for open source, pointing in particular to the fact that Microsoft remains branded a monopoly.

"A lot of people are focused on the reversal of the breakup order, but the key element of the ruling was that it confirmed that Microsoft had been engaging in monopolistic activities," said James Neiser, chief marketing officer at Red Hat. "It makes a statement about what was happening and that something needs to be done about it."

With the courts still looking over its shoulder, Microsoft continues to face scrutiny as to how it proceeds with product development moving forward, Neiser said. In addition, the ruling reminds potential Microsoft customers that the company acted illegally to maintain its monopoly, which may encourage them to seek out "more flexible" platforms from other vendors, according to Neiser.

The Association for Competitive Technology (ACT), which has backed Microsoft in the case, applauded the ruling, saying that it supports its belief that "preserving the right of a company to add features to their products is the central issue in this case." By allowing companies like Microsoft to bundle features with existing software, consumers are able to receive more value from a single product rather than having to piece applications together themselves, ACT said.

The group cautioned the District Court to consider carefully what remedies it applies to curb Microsoft's behavior. Entrepreneurship could be damaged by an industry wrapped up in legal and political infighting, ACT said.

Conversely, the Computer & Communications Industry Association (CCIA), whose members include Microsoft rivals Oracle, Sun Microsystems Inc. and AOL, as well as Yahoo Inc. and Nokia Corp., maintained that upholding the monopoly charge against Microsoft was the key point in the ruling. The CCIA went so far as to say that the court's decision could help preserve the 'new economy,' as it helped show that "lawless anti-competitive behavior" would not work in the technology sector, according to a statement.

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