To: Dick Smith who wrote (15504 ) 5/23/1998 11:23:00 AM From: Moonray Respond to of 22053
Microsoft Loses Bid to Delay Trial of Antitrust Suit Bloomberg - Fri, 22 May, 1998, 9:02pm EDT Microsoft says Windows 98 will be in stores on June 15. Washington, May 22 (Bloomberg) -- Microsoft Corp. lost its bid for a seven-month delay to respond to sweeping antitrust suits as a federal judge put the case on a faster track, setting Sept. 8 as the start of a full-scale trial. U.S. District Judge Thomas Penfield Jackson expressed concern that putting the case off until the end of the year -- beyond the Christmas buying rush -- could give the software giant an unfair advantage by letting it sell millions of copies of its new Windows 98 personal computer operating system. By year's end, ''there will be 16 to 18 million horses out of the barn and that's probably too many,'' Jackson said. Microsoft said it needed more time to respond to antitrust suits filed against it this week by the U.S. Justice Department and 20 state attorneys general. Antitrust enforcers are seeking a preliminary court order forcing Microsoft to make changes in Windows 98, set to go on sale in mid-June. Government attorneys argued a speedier pace would stop Microsoft from further harming competition by parlaying its 90 percent dominance in the PC operating systems market into control of the Internet browser market. They allege the company is using illegal business practices to beat out rivals such as Netscape Communications Corp.'s Navigator. Jackson said the September date gives Microsoft enough time to prepare while denying antitrust enforcers all they wanted -- a June 18 hearing. They asked for preliminary relief by this summer to force the company to either unbundle its Internet Explorer browser from Windows 98 or to install Navigator. Postponing any proceeding until ''November, December, January means it is not preliminary relief at all,'' Jackson told Microsoft's attorney John Warden. Instead, Jackson consolidated the hearing on the proposed injunction and the full trial on the merits of the lawsuits into one proceeding to begin in September. 'Greater Burden' In the courtroom, Warden said the trial date ''makes the burden all the greater'' on the company. Jackson replied that the date is ''fair'' for both sides. Outside the Washington-based courthouse, William Neukom, Microsoft's senior vice president for law and corporate affairs, claimed victory. He said Jackson's decision gives the company time to prepare a ''very powerful case.'' David Boies, making his debut as the Justice Department's special Microsoft trial counsel, argued that a preliminary injunction was needed by midsummer ''in order to avoid tipping the market irrevocably in Microsoft's direction.'' Postponing a hearing on a preliminary injunction until the end of the year would assure Microsoft could sell its new Windows 98 operating system without restrictions through the Christmas buying season and well into next year before a full trial could be held. Still, the September date ''really does take some of the rationale away '' from the government's case, said John Gardner, a Washington issues analyst for Charles Schwab & Co. ''This will permit Microsoft to grow market share and gain public acceptance in the marketplace.'' A September trial means ''Microsoft will not be able to drag this out,'' said Richard Schwartz, deputy chief of the New York state antitrust division. The Redmond, Washington-based company plans to ship up to two million copies of its new software package each month starting now. PC makers have already received copies of Windows 98 and can begin shipping the product shortly. Microsoft also changed the date of Windows 98 official release to June 15, rather than the June 25 date it has targeted for months. The company argued that a seven-month delay was ''reasonable and fair'' to allow it to interview the government's witnesses and take depositions from computer makers and rivals, including Netscape. 'Powerful Presentation' Beyond ensuring Microsoft's Internet browser isn't the only one available to consumers using Windows 98, the suits also seek an injunction that lifts restrictions on how PC makers display other software products on the desktop screen of Windows 98 and ends exclusionary contract terms. Jackson ordered Microsoft to filed detailed responses to the lawsuits by July 28 and to file its opposition to the preliminary injunction request by Aug. 10. Last December, Jackson made the controversial decision of granting a preliminary injunction against Microsoft that federal antirust enforcers didn't even request. In that case, dealing mainly with Windows 95, Jackson ordered the company to stop requiring that PC makers take its Internet Explorer browser as a condition for obtaining Windows. A three-judge appeals court is reviewing this ruling. Microsoft shares fell 13/16 to 85 9/16. For the Justice Department, the Sept. 8 trial could mean a busy fall. The government's antitrust suit against Lockheed Martin Corp.'s proposed $11.4 billion purchase of Northrop Grumman Corp. also is set to start the same day at the same courthouse. o~~~ O