Consumer groups cite Microsoft ruling as victory

By Daniel Sieberg
CNN Sci-Tech

(CNN) -- Consumer groups have been quick to characterize Thursday's Microsoft antitrust ruling as a win for their constituents -- even after a federal appeals court reversed a lower court decision requiring the company be broken up.

While the case has been remanded to a new judge for further proceedings because of "judicial misconduct," consumer advocates say the ruling proves that Microsoft is guilty of violating antitrust laws and will continue to face an uphill legal battle.

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The Microsoft position, of course, is quite the opposite.

"We are pleased that the court has overturned the bulk of the lower court's ruling," company spokesman Jim Cullinan tells CNNfn, "and today's ruling significantly narrows the case and removes the breakup cloud from the company."

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But consumer advocates are lining up to spin the day's developments another way.

James Love is the director of the Consumer Project on Technology, founded in 1995 by consumer advocate and former Green Party presidential candidate Ralph Nader. It's a nonprofit, privately funded group that focuses on intellectual property rights and health care, electronic commerce and competition policy.

Love says he believes that while the decision comes down harshly on U.S. District Court Judge Thomas Penfield Jackson -- who originally ruled against Microsoft -- the company's ordeal is far from over.

"I think it's bad for Microsoft," says Love. "They're not out of the woods yet, that's for sure. Not by any stretch of the imagination."

Microsoft is essentially guilty as charged, Love says -- the only question now is what the remedy will be.

"The average person should be pretty happy," he says. "Microsoft was trying to get a ruling to make it impossible to enforce the antitrust laws. It [this decision] means the antitrust laws are still here and can apply when it comes to the software market."

Uncertain future

Bert Foer, president of the American Antitrust Institute, echoes Love's sentiments about Microsoft's uncertain future. Yet despite some analysts who say a Microsoft breakup is now unlikely, Foer said that he believes the company could still be split into two parts.

Regardless, he says he also feels that consumers will benefit from this exercise in antitrust law.

"This is very significant for consumers, and to the high-tech industry," says Foer. "It means that the antitrust laws have dynamic vitality in the new economy and can protect customers from monopoly pricing and attempts to stifle innovation."

The American Antitrust Institute is a nonprofit, independent research group that advocates the expanded use of antitrust laws.

Representatives at the Washington-based branch of the Consumers Union -- the nonprofit product-testing organization -- are reluctant to comment in detail on the case, saying other groups were watching it more closely.

But Consumers Union spokesman David Butler says the case will be a major test of the Justice Department under the Bush administration.

Consumers will have to wait for other legal outcomes before it's clear whether this decision will benefit the marketplace and consumers, Butler says.

"It's difficult to say. We don't know how the Department of Justice will follow through yet."

Officials from the main competition for Microsoft's Internet software -- AOL's Netscape -- say they have no immediate comment on the ruling. AOL Time Warner is the parent company of CNN.com.