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

To: RetiredNow who wrote (5877)	4/22/1998 12:44:00 AM
From: michael redmond	Read Replies (1) \| Respond to of 74651

Mindmeld et all...Here's that WSJ story. Since I'm compromising intellectual property, I feel its only fair to throw in an ad plug...Just $49 a year for a full 12-month on-line subscription. ********************************************************************************* Microsoft Browser Injunction Comes Under Fire at Hearing Appeals Panel Seems to Back Firm's View That Order Exceeded the Court's Power By JOHN R. WILKE Staff Reporter of THE WALL STREET JOURNAL WASHINGTON -- A federal judge's order reining in Microsoft Corp. came under fire from a three-judge appeals panel reviewing government efforts to challenge Microsoft's enormous power over the software industry. While it is impossible to handicap a decision based on questions from the bench, the judges seemed inclined to agree with Microsoft's argument that the Dec. 11 order went beyond the lower court's authority. The preliminary injunction required Microsoft to offer computer makers a version of its dominant Windows software without its Internet product. ÿÿ<Picture: CNBC Dow Jones Business Video>ÿÿ<Picture: Media>Herbold Comments on Case Operating chief Robert Herbold says Windows '98 is on track for release with an integrated Internet browser.ÿÿÿÿÿÿ ÿÿ<Picture: Media>Attorney Defends Microsoft Microsoft's William Neukom says high-tech firms need the freedom to improve product quality.ÿÿ<Picture: Learn About CNBC/Dow Jones Business Video> <Picture: Get started with audio/video> "That's not the way we hand out preliminary injunctions," Judge Patricia Wald, a member of the panel, said at Tuesday's hearing. The order was imposed by U.S. District Court Judge Thomas Penfield Jackson, who found a threat that Microsoft could extend its monopoly in desktop software into Internet software. But the ruling went beyond the government's request that the company be found in contempt for violating a 1995 order limiting its sales practices. The review by the U.S. Court of Appeals could be just a warmup for a wider battle, one that could define the role of antitrust in the evolution of electronic commerce. The Justice Department fears that the Redmond, Wash., company wants to use its enormous power in personal-computer software to dominate the Internet as well and is weighing a new, broader antitrust case against the company. The spotlight on Microsoft has grown white-hot in recent weeks as the federal investigation closes in on the company following a dramatic Senate Judiciary Committee appearance by Bill Gates, Microsoft's chairman. While Mr. Gates's company has become a powerful engine of the nation's technology-driven economy, its might is increasingly being compared with the Standard Oil trust broken up earlier this century in an epic antitrust battle. At Tuesday's hearing, Judge Wald said she found no precedent for Judge Jackson's imposing the injunction without a hearing or without proving "irreparable harm," the usual standard for a preliminary injunction. Justice Department Reply Justice Department attorney Douglas Melamed countered that the government doesn't have to show harm to enforce the law. Referring to the government's 1995 consent decree with Microsoft, he said that "it is clear a federal judge has inherent authority to enforce his order." The judges, who adjourned Tuesday without making a decision, are considering Microsoft's appeal on a expedited basis. Observers expect a relatively prompt ruling, within the next month to six weeks. But Tuesday's proceeding could take on diminished importance if the Justice Department files a new case against Microsoft. That case, if it goes forward, would go beyond terms of the 1995 decree and likely charge Microsoft with "illegal maintenance and extension" of a monopoly in desktop software. <Picture: [Go]>Bork Calls for New Antitrust Case (April 21) * * <Picture: [Go]>Company Profile: Microsoft <Picture: [Go]>Issue Briefing: Microsoft and Justice <Picture: [Go]>Join the Discussion: What should the Justice Department do about Microsoft? Has Microsoft simply proven too successful for its competitors? Indeed, Judge Wald questioned whether the current case would be relevant after the release of Windows 98, the next version of Microsoft's dominant operating system. Computer makers are expected to get the software next month, and the public in June. The judges also raised questions about the case's key issue, Microsoft's practice of integrating new features into Windows that thwart smaller competitors. Much of the government's focus is Microsoft's attack on Netscape Communications Corp.'s Web browser; Microsoft plans to add its Internet Explorer browser to Windows 98. Consumers vs. Competition "The key issue that a court eventually will have to decide is whether the benefit to consumers that comes from Microsoft's bundling of these two products together is worth the disastrous effects on competition," said George Cary, a former Federal Trade Commission litigator now at the Washington law firm of Cleary, Gottlieb. He said that "with the current case bollixed up in procedural issues of interpreting the 1995 order, it's all the more important that the department decide quickly whether or not to bring a new case." Overall, he added, Tuesday "was not a good day for the government." Microsoft's counsel, Richard Urowsky, complained that "virtually everything in the government's case was hearsay" and that the company had been denied due process in the preliminary injunction. But one judge raised the issue of whether the lower court would have reached the same result regardless. Mr. Urowsky was also sharply critical of the injunction's result: Microsoft agreed to provide a version of Windows in which access to the Internet technology is disabled but much of the underlying code remains intact. Internet Explorer is still in Windows, he complained, "just hidden from the people who bought and paid for the product." He noted that none of the PC makers offered the court-ordered version accepted it. The appeals panel also is reviewing Judge Jackson's decision to name Internet expert Lawrence Lessig of Harvard University as an adviser, or special master, in the case. The panel addressed the issue only briefly, but seemed skeptical. Microsoft said Mr. Lessig was biased, a claim sharply rejected by Judge Jackson.