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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Paul K who wrote (57910)	5/8/2001 1:15:05 PM
From: Paul K	Read Replies (1) \| Respond to of 74651

"Appeals court should overturn Microsoft case" Editorials & Opinion : Tuesday, May 08, 2001 Copyright © 2001 The Seattle Times Company By Paul Guppy Special to The Times A federal appeals court in Washington, D.C., will soon decide whether, as the federal government contends, Microsoft is an illegal monopoly. The court is reviewing the ruling of trial judge Thomas Penfield Jackson that Microsoft violated federal antitrust laws. He has determined Microsoft should suffer the severest penalty possible: the break-up of the company. However, our research finds many compelling reasons why the appeals court should overturn the case. The case is of more than passing interest to the people of our state. Microsoft employs over 18,300 people in Washington and provides business for more than 3,000 retail stores, technology partners and software vendors. Some 307,000 state residents own stock in the software giant. The government's aggressive antitrust case has already severely impacted Washington's economy by helping to evaporate several billion dollars in stock value. The benefits go beyond economics. The company gave over $38 million in financial and in-kind contributions to schools, teacher training, the arts and community-service programs in the state over a recent two-year period. Microsoft is a worldwide company, but its substantial economic and charitable presence here make the appeals court's upcoming decision a matter of unique importance to our state. What are the chances Judge Jackson will be reversed in this case? If his record on past trials is any gauge, the odds are surprisingly high. The judge has had a reversal rate of more than double the average of other district court judges in the District of Columbia. Since 1996, the average reversal rate for all judges on the circuit was 12 percent, while Judge Jackson's rate over the same period was more than 28 percent of cases overturned. A number of decisions made during the trial raise troubling questions about Judge Jackson's ability to conduct a balanced and rigorous hearing of the case: • He violated pre-trial rules by allowing a viewing in open court, with the media present, of video-taped depositions even though all witness depositions were supposed to be closed to the public. • He arbitrarily restricted the number of witnesses to 12 per side in the most complex antitrust case ever. • Limiting the number of witnesses led to introduction of hearsay evidence, secondhand reports of what witnesses said they heard from someone else. • Judge Jackson introduced his own evidence against Microsoft and had it placed in the official record. • He ordered attorneys not to talk during breaks or outside the courtroom with witnesses who were being cross-examined, a rule that, because of its timing, only applied to Microsoft's lawyers and witnesses. The government claimed that Microsoft's browser software, Internet Explorer, is not an integral part of the Windows operating system, as Microsoft claimed. However, a government technical witness unsuccessfully tried to remove Internet Explorer and still operate Windows. The government failed to prove that Internet Explorer could be divorced from Windows, and was therefore being forced on unwilling customers. The government also failed to support its claim that Microsoft unfairly blocked competitors by controlling what appears on the opening screen of the Windows program. Other companies have no trouble reaching new customers through any number of means, such as "carpet bombing" households with mailings of free Internet-access software. In fact, our research finds that events since the case started show that the most dire predictions made about Microsoft's supposed dominance of the market are entirely unfounded. It is striking that the government's antitrust case has sparked no mass consumer movement against Microsoft. On the contrary, consumers continue to demand Microsoft products in record numbers. The company is simply following the strategy that has always been the key to good business in America's free and dynamic economy: offer high-quality, reliable products that people want at prices they can afford. Running a successful business should not be against the law, a principle the appeals court will soon have a chance to reinforce. Paul Guppy is vice president for research with the Washington Institute Foundation, a Seattle-based think tank that champions free-market principles. archives.seattletimes.nwsource.com