Microsoft appeals

Sketch by Dana Verkouteren

From Steve Young
CNN Correspondent

(CNN) -- Microsoft this week had two days of arguments before a federal appeals court about why the company shouldn't be broken up.

On Monday, both Microsoft and the government faced tough questions from seven judges who know they will be writing the first important digital age antitrust decision for the new millennium.

Lawyers for both Microsoft and the government expected the U.S. Court of Appeals to be friendlier to the software giant than U.S. District Court judge Thomas Penfield Jackson, who last year ordered the breakup of Microsoft.

But the seven judges turned out to be an equal opportunity tormentor Monday -- putting Microsoft on the griddle in the morning, then turning up the heat on the government in the afternoon.

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Microsoft claimed it didn't bundle its Internet Explorer Web browser with its Windows computer operating system to crush competitor Netscape.

The company also maintained that it's not a monopoly, because the market it competes in is more than just personal computers -- it encompasses practically every kind of device that uses software. But the judges didn't seem to buy that argument.

Then came the grilling for the government after lawyer John Roberts said Microsoft broke the law by refusing to let PC companies drop Microsoft's Web browser. Judge Raymond Randolph quipped, "It's almost like you're saying I'd like to buy a clock radio without a clock."

The dispute was over what the law calls "tying" -- bundling one product with another. Most antitrust experts believe if the appeals court knocks down that part of Judge Jackson's ruling, it's likely to say Microsoft needs to be reined in, but not broken up.

"It would be relatively breathtaking and difficult for the panel to simply brush aside everything that Judge Jackson found in his conclusions... simply to find that there's no violation," said William Kovacic of George Washington University.

On Tuesday, the appeals court skewered Jackson for giving interviews about the still-pending Microsoft case. The interviews were published in newspapers and a book. Attorneys for Microsoft told the panel that Jackson's comments -- including one comparing the company to drug dealers -- showed outrageous bias and were "motivated by a desire to punish" the company.

The judges didn't appear convinced it was bias, but indicated it certainly had the appearance of bias, and they blasted Jackson in tones ranging from dismay to anguish.

Judges have no right to "go run off our mouths. The system would be a sham if all judges went around doing this," said Harry Edwards, chief judge of the appeals court.

"There are lots of things that we think and feel about advocates and parties during the course of a proceeding," Judge David Tatel said. "It doesn't mean ... because those feelings developed during the course of a proceeding, we're to run off our mouths in a pejorative way. It creates an appearance problem."

Besides the finger-pointing at Jackson, one of the judges laid some blame on Microsoft for not complaining to Jackson months ago.

Microsoft's legal team argued that before reaching his final decision, Jackson failed to take into account some 50 pieces of evidence and testimony from additional witnesses. The company now wants the appeals court to throw out almost three years of legal work and start the trial over again with another judge. The appellate panel didn't seem to think it had enough facts to warrant something that drastic, but Microsoft's attorneys disputed that Jackson's comments to the press should be enough for the U.S. Court of Appeals to overturn his ruling.

"I think that's one factor that ultimately is going to weigh in favor of not requiring the entire matter to be redone," says William Kovacic of George Washington University.

Some of the judges suggested that the case could be sent back to a lower court for clarification, but a final decision on the appeal is expected by April or May. At that time, most observers expect Microsoft will again try to settle with a Justice Department that may be more conciliatory.

Microsoft appeal
February 26, 2001
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