Microsoft Antitrust Case

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The Verdict Contd...

Business Week argued that a structural remedy would have long-term benefits too. It said, "Given the ferociousness of Gates as a competitor, losing the Windows monopoly could very well unleash a powerful new groundswell of profitable software innovation by Microsoft. By contrast, effective conduct remedies hurt shareholders more by hobbling the company over the long run."

The Appeal In September 2000, the Supreme Court declined to consider the government's bid to break up Microsoft as a remedy for uncompetitive practices and chose to send the case to the lower court. In February 2001, in response to Microsoft's appeal against Jackson's ruling, the appeals court heard arguments for two days, allowing only about 30 minutes for oral arguments. During these proceedings, attorneys for Microsoft focussed on Jackson whose ruling they said was motivated by a desire to punish the company. They also argued that Jackson's ruling was based on his personal feelings about the company and its top executives, including Gates. The appeals court judges raised questions over the impartiality of Jackson, who in media interviews had compared Bill Gates to Napoleon and said that the firm's executives acted like children.

The appeals court ruled that Jackson had conducted himself improperly, leaving himself open to allegations that he was biased against Microsoft. In June 2001, the appeals court reversed Jackson's ruling that Microsoft be broken into two companies. The court vacated in full the final judgement and entrusted the case to a new judge.

However, the court upheld Jackson's conclusion that Microsoft did have a monopoly in the market for computer operating systems and maintained that monopoly power gained through anticompetitive means violated US antitrust laws. The US Justice Department saw in the appeals court decision a "significant victory," because it upheld the government's position that Microsoft had abused its monopoly power.

In July 2001, the DOJ asked for the Microsoft antitrust case to be taken up by a new District Court judge immediately, but said that it did not intend to seek a rehearing before the Court of Appeals or to seek Supreme Court review of the case. In August 2001, Microsoft appealed to the Supreme Court to overturn the District Court ruling by Jackson that it had operated as an illegal monopoly, harmed consumers, and stifled competition.

In its petition to the court, Microsoft claimed that Jackson's entire ruling should be "thrown out." However, analysts wondered whether the Supreme Court would agree to open the case. Said Bob Lande, Professor of Law, at the University of Baltimore, "The Supreme Court is not going to reverse the court of Appeals. Microsoft is not going to walk free. It is just a delaying tactic. They have no realistic chance of getting this overturned."

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