Microsoft Wins Key Battle

Supreme Court's pass on case buys time

WASHINGTON

Microsoft Corp.'s antitrust fight against a breakup of the company was helped in a big way last week by the U.S. Supreme Court when it rejected government arguments that the case deserved an expedited review by the nation's highest court because of its "immense" economic importance.

The immediate impact of the Supreme Court's decision is to prolong a case that has been in litigation since 1998, when 19 states and the U.S. Department of Justice filed a lawsuit against Microsoft accusing it of anticompetitive behavior.

With a final decision now perhaps two years away and a breakup beginning to appear unlikely, Bruce Levin, information technology manager at Faulding Inc., an Elizabeth, N.J.-based generic pharmaceuticals maker, said the case will have no affect on his IT planning. "It will have virtually no impact on the deployment of technology at our company," he said.

Levin isn't alone in that belief. "I think that the time frame could be such that by the time they get around to a decision, [the case] will be a moot point," said Joe Muehlethaler, information systems manager at Manitowoc Cranes Inc. in Manitowoc, Wis.

The case will now go to the U.S. Court of Appeals for the District of Columbia, a court that may be a far friendlier venue for Microsoft than trial Judge Thomas Penfield Jackson's courtroom.

The company's reaction was muted. If Microsoft had just received, in effect, a home-court advantage, it wasn't going to show it and risk angering the appeals court. Microsoft spokesman Jim Cullinan simply reiterated what the company has said all along: that it remains "confident of our case on appeal." The Justice Department was similarly restrained and said through a spokesperson that it's looking forward to presenting its appeal as expeditiously as possible.

Seven judges will hear the Microsoft case. Two of those judges, Stephen Williams and Raymond Randolph, were part of a three-judge panel that gave Microsoft a significant win in its antitrust battle in 1998 by reversing an injunction issued by Jackson that prohibited Microsoft from bundling its Web browser with Windows 95.

The appeals court "is likely to be sympathetic to a number of the arguments Microsoft will make," said William Kovacic, a George Washington University law professor. Microsoft "can have a strong measure of confidence that they will avoid a breakup."

Involving the appeals court in the case "could only lead to [Microsoft's] advantage," because the company will have more opportunity to argue its case before it inevitably winds up in the Supreme Court, said Yee Wah Chin, an antitrust attorney at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC in Washington.

Time helps Microsoft. "Each day brings new technological and economic developments that arguably render this case less relevant to protecting competition," said Hillard Sterling, an antitrust attorney at Gordon & Glickson LLC in Chicago.

Michael Cusumano, an MIT management professor and Computerworld columnist, said the urgency of the case has long since passed. "The time to have taken strong action on this issue was maybe three or four years ago," he said.

Copyright © 2000 IDG Communications, Inc.

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