Opponents of Microsoft Corp. file final proposals at federal Court

Justice Dept. and states rebut with heavy sarcasm denial of illegal monopoly

January 26, 2000|By Lyle Denniston | Lyle Denniston,SUN NATIONAL STAFF

WASHINGTON -- The Justice Department and 19 states renewed their plea yesterday for a court ruling that would denounce Microsoft Corp. as an illegal monopolist -- a declaration that could lead to mandatory changes in its business conduct or to an actual breakup of the company.

Restating their view that Microsoft has harmed the nation's computer-using public by strong-arming actual or potential competitors, the department and the states made their final written proposal for a ruling that the company has broken the nation's antitrust law.

`Nothing of substance'

Microsoft's insistence in court papers last week that it has broken no law, the new government filing said, offers "nothing of substance" to refute the claim that it has illegally waged "a multi-front campaign" to shore up its monopoly over the systems that run most of the nation's personal computers.

The company had said that while its actions "may have been aggressive," everything it has done toward competitors was "clearly within the law."

After Microsoft gets a last chance next week to assert in writing why it should not be ruled a lawbreaker, U.S. District Judge Thomas Penfield Jackson will begin drawing his own conclusions. He will hold a hearing next month to question both sides about legal issues before he makes up his own mind.

In November, the judge concluded that Microsoft does have a monopoly over computer operating systems, with its well-known, ubiquitous Windows 95 and 98 systems.

No finding of fault

But that was only a factual conclusion; he did not then translate it into a finding that Microsoft actually broke the law in creating the monopoly or maintaining it.

If the judge ultimately agrees with Microsoft's government accusers about antitrust violations, he would then fashion remedies for any misconduct he found.

So far, Jackson has given no hint of what changes he would order if he rules that Microsoft violated the Sherman Antitrust Act. He has said that he wants the Justice Department and the 19 states to agree on remedy suggestions.

Though there were reports this month that the Justice Department and the states were moving toward a proposal to break Microsoft's monopoly by dividing the company into two or three separate companies, the Associated Press reported yesterday that some of the states do not share that goal as their top priority.

Ohio's attorney general, Betty Montgomery, for example, was quoted as saying that she favored "a conduct resolution" -- that is, compelled changes in Microsoft's business behavior, not its structure as a single company.

April ruling likely

The Justice Department and the states have perhaps two or three more months to work toward a common plan for a remedy. Judge Jackson may not rule until April on whether Microsoft did act unlawfully.

In the meantime, the accusers and Microsoft have been meeting with a Jackson-appointed mediator, U.S. Circuit Judge Richard A. Posner of Chicago, to see whether a negotiated out-of-court settlement can be reached. Judge Posner, an antitrust expert, is generally known to be skeptical about dividing companies as a remedy for antitrust violations.

In yesterday's legal filing, the second on legal issues submitted by the Justice Department and the 19 states suing Microsoft, the accusers dismiss -- sometimes with heavy sarcasm -- every legal defense Microsoft put forward last week.

They accuse the company's lawyers of relying on legal precedents that bear in no way on the economics of the high-technology world of computers.

Aside from some refinements in their legal points, the department and the states essentially repeat their arguments that Microsoft gained a monopoly with its Windows operating system, illegally forced those who want Windows to include Microsoft's Internet Explorer Web browser, gained exclusive business rights with computer manufacturers and Internet service providers, and harmed Netscape Navigator as a browser rival and as a competing source of "platforms" for uses other than browsing the Web.

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