Seattle Times, Sunday, March 04, 2001, 12:46 a.m. Pacific
seattletimes.nwsource.com
Case against Microsoft fades
by John Hendren
Seattle Times Washington bureau
WASHINGTON - If the Microsoft case had emerged from John Grisham's keyboard, he'd be accused of overreaching.
The antitrust case against the world's largest software maker involves a tart-tongued judge accused of bias, detectives offering cash for trash, secret meetings in which a corporate giant was said to threaten to cut off another's "air supply" and a former "boy wonder" who, rivals say, wants to take over the technological world.
Yet the nonfiction plot of the United States vs. Microsoft took another dramatic twist last week that blurred the roles of victim and villain. Antitrust experts who entered the U.S. Court of Appeals for the District of Columbia on Monday were questioning whether a plan to break the company in two would survive two days of courtroom arguments. They left Tuesday afternoon wondering if any part of the case would survive.
"I think there's a 50-50 chance they'll dismiss it outright," said Ernest Gellhorn, a law professor at George Mason University. "I went into the oral arguments thinking some of it will survive, but every element of the government's case got challenged."
Attorneys for the Justice Department and the District of Columbia and 18 states that joined the case spent most of oral arguments defending their case and the judge who ruled in their favor. Many independent legal observers expect the appeals panel to toss out the historic breakup verdict, yet they expect a weakened case to endure, with the appeals judges upholding at least one of the three antitrust findings against the company.
The case now has three possible destinations: the U.S. district court that spawned the breakup order, the U.S. Supreme Court or the Justice Department for a settlement agreement.
District Judge Thomas Penfield Jackson found Microsoft guilty of illegally maintaining its monopoly, of attempting to monopolize a second market and of illegally tying a new product with a monopoly product to force consumers to buy both from Microsoft.
The judges were especially aggressive in questioning Jackson's finding that Microsoft illegally added the Internet Explorer browser to Windows in an effort aimed at crushing Netscape Communications' rival browser, Navigator. Prosecutors said Microsoft feared that Netscape would eventually develop Navigator into an operating system to compete with Windows.
But the judges appeared highly skeptical of the tying complaint. The court ruled in a related 1998 case that tying was permissible as long as there was a consumer benefit. The court's resident antitrust expert, Douglas Ginsburg, repeatedly noted that Netscape successfully distributed its products to millions of consumers each year.
The judges also grilled a government lawyer on the finding that Microsoft attempted to monopolize the market for Internet browsers by a series of practices allegedly aimed at crushing Netscape.
If only one of the three charges is upheld, legal handicappers say it is likely to be the monopoly-maintenance claim, in which Microsoft was found to have used exclusive contracts and other methods to bar competitors from challenging the company's monopoly on the market for personal-computer operating systems.
Even if all the rulings are upheld, the judges appeared highly skeptical of Jackson's remedy of breaking Microsoft in two and setting business restrictions for three years. Microsoft has argued that the order was unprecedented and was made without giving the company a chance to offer evidence against it. If one or more of the charges is overturned, the breakup is almost certain to be rejected
"Even if the monopoly-maintenance claim or judgment were affirmed in toto, but without the tying claim, I don't know how this court could conclude that that is the relief the district court would have entered based solely on that claim," Ginsburg said.
The court has another reason to consider throwing out the breakup order: Jackson's out-of-court statements, which the Chief Judge Harry Edwards said violated the judicial code of conduct by showing an appearance of bias. Six of the seven appellate judges expressed varying degrees of concern over Jackson's comments to reporters that, among other things, compared Microsoft Chairman Bill Gates with Napoleon and the company to a drug gang.
Behind the questions
Of course, courtroom prognosticators might all be wrong. This would not be the first case in which courtroom observers were fooled into believing that the judges' questions represented their points of view.
Judges sometimes act as devil's advocates in pursuing every legal avenue and sometimes ask a pointed question to prompt a response that strengthens the answering lawyer's case. Few know that better than Robert Bork, a former judge on the appeals court who now consults for the anti-Microsoft trade group ProComp.
"I think it's impossible to tell from the questions which way the judge is leaning," Bork said.
Gellhorn, the George Mason University professor, conceded that it remains possible, but noted that the questions were disproportionately aimed at the government, especially on tying, attempted monopolization and the remedy, when the aggressive questioners on the court allowed Microsoft's lawyer to offer a monologue.
"They let Stephen Holley talk for 15 minutes without one single question. The court only does that for one reason: They agreed with him," Gellhorn said. "They did not mislead us on Judge Jackson's conduct in terms of his extrajudicial comments."
The next stop
Unless the appeals court upholds Jackson's findings entirely, the court's standard procedure would be to send the case back to the lower court for corrections. Microsoft has asked for Jackson to be recused from further proceedings, a ruling the judges appeared strongly willing to grant.
Before that happens, however, a new presidential administration with a more limited view of antitrust law could settle the case. President Bush's choice for antitrust chief, Charles James, has criticized the government's suit against Microsoft as recently as last year.
The landmark AT&T breakup was done by agreement in 1984 after 12 years of litigation. In the Microsoft case, both sides tried to reach an accord out of court last year, with Gates reportedly signing a draft of a settlement agreement that included strict limits on how the company could do business. The Justice Department rejected it.
Now, if the appeals court overturns much of Jackson's rulings, a new presidential administration may seek to renew negotiations. If Microsoft officials like the ruling the company gets on appeal, however, in the ever-quotable words of George Washington University antitrust expert William Kovacic, "they could tell the government to get stuffed."
The case could also go to the Supreme Court, either immediately or after further review by the district court. Whether the high court takes it depends largely on whether the U.S. solicitor general asks for its review. The court takes about half of those requested by the solicitor general, compared with about 1 percent of all other cases.
Court watchers say the court is likely to accept a review if the appeals court decides it based its decision on groundbreaking or evolving legal concepts. The high court is less likely to consider it if the appeals ruling turns on something as mundane as Jackson's conduct, observers say.
Yet this is no ordinary case, and the high court has shown an interest in high-profile cases, such as Bush vs. Gore, the Florida vote-counting case that ultimately decided the presidency last year.
"This is a court that really wants to be in the middle of things," said Erwin Chemerinsky, a law professor at the University of Southern California. "This is such an important case for our society, for new technologies. I think that would make some of the justices very disposed to want to take the case."
John Hendren can be reached at 206-464-2772 or jhendren@seattletimes.com. |
