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Microsoft case gets another day in court
NEW YORK (CNNfn) -- A federal appeals court on Thursday reversed a lower court's ruling that Microsoft be broken into two companies as a remedy for anticompetitive practices, or business policies that are determined to unfairly dominate a market. The law does not forbid monopolies; it only bars companies from maintaining and expanding that monopoly at the expense of competitors. Microsoft was deemed to have abused their prominent market position by, among other things, bundling their Internet Explorer browser with Microsoft Office software and offering it free of cost to all users. The U.S. Court of Appeals for the District of Columbia vacated, or legally voided, the lower court's final judgment and sent the case to a new judge. In addition, the court also said Judge Thomas Penfield Jackson -- the U.S. District Court judge who originally ruled Microsoft should be split in two -- violated ethical guidelines requiring judges to avoid public comments on pending cases and avoid the appearance of impropriety. However, the court affirmed Judge Jackson's conclusions that Microsoft does have a monopoly in the market for computer operating systems and violated U.S. antitrust laws. Appeals court was Microsoft's best chanceMany legal experts believed the Appeals Court represented the best chance for Microsoft to overturn or substantially weaken the sweeping ruling of U.S. District Court Judge Jackson. After ruling that Microsoft violated U.S. antitrust laws, Judge Jackson last June ordered the company split into two smaller companies to prevent it from violating state and federal antitrust laws in the future. In February, the Appeals Court held two full days worth of oral arguments in the appeal. During those proceedings, attorneys for Microsoft focused in large part on Judge Jackson, whose ruling, they said, was motivated by a desire to punish the company. They also argued that Jackson's ruling was biased and based on his own personal feelings about the company and its top executives, including chairman Bill Gates. Jackson's impartiality questionedThe appeals court ruled that Judge Jackson improperly conducted himself in the case, leaving himself open to the appearance he was biased against Microsoft. "We vacate the judgment on remedies, because the trial judge engaged in impermissible ex parte (a one-sided or partisan point of view) contacts by holding secret interviews with members of the media and made numerous offensive comments about Microsoft officials in public statements outside of the courtroom, giving rise to an appearance of partiality," the court wrote in the opinion. Judge Jackson's actions "would give a reasonable, informed observer cause to question his impartiality in ordering the company split in two," the appeals court said. Ken Wasch, president, Software & Information Industry Association, which had lobbied against Microsoft throughout the antitrust trial, declared the appeals court ruling a victory. "The Court of Appeals has now joined the U.S. Justice Department, the District Court and most of the information technology industry in recognizing that Microsoft's business practices are not just business as usual," he said. "Microsoft' tactics have illegally cut off competitive technologies and therefore effectively deprived consumers of choice in the information technology products they purchase." But some legal experts characterized the decision as a victory for Microsoft and said it is more likely the two sides will settle the case. It puts off the day of reckoning for Microsoft, so on balance, I think Microsoft comes out better in this complex 'good news-bad news' decision," said Harvey Safferstein, an antitrust attorney at Mintz Levin in Los Angeles.
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