Feb 22, 2000 (Tech Web - CMP via COMTEX) -- Microsoft and the
Department of Justice wrestled Tuesday over whether an appeals court
decision that supported the software giant's integration of its browser
and Windows operating system immunized it from U.S. antitrust law.
Attorneys for the two protagonists presented their legal arguments in a
final inning before U.S. District Judge Thomas Penfield Jackson rules
if the software titan violated antitrust statutes.
The DOJ and 19 states again argued that Microsoft abused its operating
system monopoly through illegal business practices, such as
exclusionary contracts with PC makers and Internet providers, and
strong-armed tactics that foreclosed competition between customers of
the Redmond, Wash., software company and its rivals. Microsoft's
conduct extended its dominance to Internet browsers, crushing its
competitor Netscape in the process, they argued.
DOJ attorney David Boies told the judge any benefits that would be
gained from the integration cannot trump the damage done if the tying
was for an anti-competitive purpose.
"The overall effect of Microsoft's behavior was to handicap its
competitors," Boies said.
A benefit must come from tying the two products at the design phase
that cannot be duplicated under terms of a contract to be exempt from
antitrust oversight, said Boies, citing Harvard cyberspace law
professor Lawrence Lessig in a recent advisory document for the judge.
A 1998 appellate court decision previously supported Microsoft's right
to integrate its browser with Windows 95.
The tying charge is one of the weakest parts of the government's case,
said Robert Lande, law professor at the University of Baltimore. The
government spent most of its presentation bulking up its contention
that Microsoft did not gain dramatic efficiencies or benefits by tying
the two products, which were separate originally.
"Bolting does not exempt it," Boies said. Microsoft repeatedly said the
government's case lacked sufficient evidence and that its pricing and
innovation by integrating its Internet Explorer browser with Windows
benefited consumers. Microsoft must continue to compete aggressively
and improve its products because the market changes so fast.
Microsoft attorney John Warden also cited Lessig in demonstrating that
Microsoft was within the law to integrate its browser with Windows.
Lessig said the government has not made a sufficient claim of tying,
Warden said.
"The court interpreted the moment of integration was at the design
stage," he said.
Product design improvements that benefit cannot violate antitrust laws,
Warden said. And there is no requirement that a company has to provide
every version of a product to satisfy the law. The DOJ has requested
stand-alone versions of Windows and its Internet Explorer browser.
He compared it with buying The New York Times, which comes only with
all of its sections and columns and does not offer separate versions.
"There is no commercially viable alternative to The New York Times,"
Warden said. "I wish they'd get rid of the chess column, which pops up
in different places. But they are not required to offer separate
versions."
Warden said the decisions made in this trial will shape the rules of
competition in the highly charged and fast-moving software and Internet
industry.
"The rules of competition must be clear -- only then can companies
apply them to their conduct," said Warden, who complained of the
"amorphous Justice standard."
The legal arguments and case citings mirrored conclusions of case law
previously filed with the court, broke no new ground, and seemed to
bring the case full circle. But it gave the cast of characters one more
chance to shore up their case.
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