Microsoft challenged from bench

But no indication how the case may be decided

Standard Oil comparison

A law professor sees no victory by either side

February 23, 2000|By Mark Ribbing | Mark Ribbing,SUN STAFF

WASHINGTON -- The judge in the Microsoft Corp. antitrust trial actively challenged the software giant's counsel yesterday during courtroom arguments, reacting at times with open skepticism. But U.S. District Judge Thomas Penfield Jackson gave no outward indication how he might rule on the legal issues of the case, which he is expected to do this spring.

At one point, Jackson compared Microsoft, the world's largest software company, to John D. Rockefeller's Standard Oil Co., the subject of a celebrated 19th century antitrust controversy.

William Kovacic, a professor of law at George Washington University in Washington and a close observer of the case, said neither Microsoft nor the Justice Department scored a clear victory, and he said Jackson's questions of the attorneys provide little guidance on who has the upper hand. He said experienced attorneys "give a lot of cautions about inferring from a judge's questions what he's thinking about."

Jackson's thoughts loomed large before yesterday's arguments even began. In November, when he released his factual findings in the case, he agreed with virtually every point that federal and state attorneys had made against Microsoft. Jackson said then that Microsoft had acted as a monopoly in its efforts to defend and expand its dominance in the market for operating systems, which act as the brains of personal computers. According to International Data Corp., Microsoft was responsible for 88 percent of the desktop operating systems shipped in 1998, a 1 percent increase over 1997.

Jackson did not release his legal conclusions at the same time as his factual conclusions, apparently hoping that releasing the factual findings separately would prod Microsoft toward an out-of-court settlement. The judge recently appointed prominent jurist Richard Posner to mediate in the case, and there was some speculation that a negotiated settlement might render yesterday's arguments unnecessary.

The government lawyers invoked the factual findings frequently, insisting that Jackson's factual conclusions mandate a finding that Microsoft violated the Sherman Antitrust Act.

"Microsoft has used every tool of the monopolist's trade," said Kevin O'Connor, the Wisconsin assistant attorney general who spoke for the 19 state governments who joined in the Justice suit. "The damage caused by Microsoft's behavior is truly daunting."

David Boies, a litigator who has led the federal government's case, went through a lengthy series of references to Jackson's factual findings and scorned Microsoft's arguments. In response to Microsoft's claim that its actions had not had a significant negative effect, Boies said, "How they can make that argument with a straight face -- is not entirely clear to me."

Boies and his Microsoft counterpart, attorney John Warden, spent considerable time on what is generally considered the case's core issue: Whether Microsoft acted unlawfully to link, or "tie in," its Internet Explorer Web browser with its popular Windows operating systems.

Both sides made frequent reference to a brief written by Harvard legal scholar Lawrence Lessig. In response to a request from Jackson, Lessig filed a report devoted to the "tying in" issue. Lessig has emerged as a leading expert on technology law issues, and his filing was a fertile source of hope and discomfort for both sides.

Lessig wrote that if a 1998 D.C. Court of Appeals ruling in another case applies directly to the Microsoft litigation, the company will likely not be found to have engaged in an illegal linkage of its products.

However, Lessig also wrote that if the appellate ruling does not apply to the present case, Microsoft may be found to have acted illegally. Experts said that, because the D.C. Court of Appeals would have stewardship of the Microsoft case if it goes to appeal, Jackson will weigh Lessig's arguments with particular care.

One concern is that the appeals court is unlikely to look favorably on any ruling that asks the government to oversee high-technology design issues.

At one point, Jackson said to Boise: "The question is, what does the Court of Appeals say" in the 1998 ruling.

Boies responded that the gains that Microsoft said were the results of its design were really nothing more than the products of crafty and ham-handed distribution tactics. By taking the argument away from design issues, Boies evidently hoped to allay Jackson's fears of being reversed at the appeals level.

Microsoft's Warden initially acknowledged Jackson's unsympathetic findings of fact, then asked for a different outcome at the legal phase of the trial: "Unlike findings which are specific to this case, the court's conclusions of law will have a more general and a more lasting impact -- [and] will shape the rules of competition throughout the software industry."

Warden insisted that Microsoft's bare-knuckled tactics amounted not to illegality, but to market economics at their finest. "Tough competition to provide better products at lower prices -- is exactly what the antitrust laws encourage," he said.

Just what will happen to Microsoft now is anyone's guess. Possible penalties include government oversight of Microsoft or even the outright breakup of the company.

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