The appeals court always reviews the findings of facts. They just review it under an extremely deferential standard such that they will not disturb such finding as long as any evidence was presented to support them. Thus, if TPJ believed the government's witnesses and not MSFT's, appellate courts have no institutional competence to disturb this as they did not see such witnesses. Of course, MSFT is going to claim every error it can think of as that is how any good appeal brief is written. Doesn't mean very much. The success of MSFT's appeal will rather rest upon complex and unclear questions of law for which the appeals court will show no deference whatsoever to TPJ's ruling. On the plus side for MSFT, I don't think there is any doubt that the D.C. Circuit judges are not happy with the effort to bypass them and I am also sure that Judge Williams and Judge Randolph are less than thrilled with TPJ basically telling them they don't know what they are talking about. That being said, no one should assume that a MSFT victory is assured in this appeal. MSFT, with the factual findings against it, has an uphill battle even with a court that has historically taken a very narrow construction of antitrust law. Of course, the case will go to the Supreme Court anyway so I'm not sure why MSFT is so intent on going to the D.C. circuit as it only delays ultimate resolution for 2 or possibly even 3 years.
With respect to the claims under Sec. 2 of the Sherman Act, MSFT will most likely need to convince the appeals court that it is not a monopoly. What exactly is a "monopoly" under antitrust law has never been clear. The weakest part of TPJ's ruling to me seems to be the narrow definition of the relevant market, i.e., intel compatible pc operating systems. Clearly to many people, MACs are interchangeable with intel computers. However, even if you include MACs in the relevant market, an argument can still be made that MSFT has monopoly power over this market as they still have over 80% market share and arguably the ability to raise prices by restricting output. This is a tough one to call.
The tying claim, on the other hand, does not depend upon MSFT being a monopoly but rather it only having "appreciable economic power" in the relevant market. It is hard to imagine this threshold would not be met. MSFT's hopes here rest upon a majority of the appeals court adopting the narrow test on integration suggested by Judge Williams and Randolph in the prior ruling, a test in which a defendant need only show a plausible benefit to the consumer for the bundling. There are several potential problems I see with this. First of all, I don't think this has ever been the test for tying and I question whether the Supreme Court would adopt such a narrow test now as every defendant in a tying case can come up with plausible benefits of bundling. Second, even Williams and Randolph hinted such a test has a factual element regarding the purpose of the bundling. Where, as here, there is a factual finding that MSFT's purpose was to reduce that market share of a potential platform competitor and the alleged benefits of such integration are merely a pretext, I cannot see the appeals court ruling for MSFT on this while letting those findings of fact stand. MSFT will also try to argue that the products in question are not really distinct products and that no substantial amount of commerce was foreclosed to competitors by the bundling. While these are in themselves complex issues that are by no means clear cut, I'm not sure MSFT has the better of the arguments here. All in all, very difficult to make a prediction on the ultimate outcome. |
