Jackson: Microsoft breakup ruling 'may be vulnerable on appeal'

WASHINGTON -- The U.S. District Court judge who ordered in June that Microsoft Corp. be split into two separate companies acknowledged today that his ruling could well be overturned during the appeals process that's currently being handled by the U.S. Court of Appeals.

"Virtually everything I did may be vulnerable upon appeal," said Judge Thomas Penfield Jackson during an antitrust symposium sponsored here by the George Mason University School of Law. Jackson repeated earlier comments that he didn't really want to impose the breakup but was left with no choice when Microsoft and the government failed to settle the landmark antitrust case.

"The structural remedy was never my remedy of choice and is not even today," Jackson said. "It was always my preference that the market itself be the one to rectify the dysfunctions disclosed by the evidence [against Microsoft]."

But when attempts to negotiate a settlement ended, Jackson said, a "forcible application of the law became the last resort." The U.S. Department of Justice (DOJ) and the 19 states involved in the case wanted Microsoft to be broken up, he noted, and they obtained advice from "multiple consultants who know vastly more about economics . . . than I do."

Jackson sided with the DOJ and the states by ruling that Microsoft had engaged in anticompetitive business practices and abused its monopoly power in the desktop operating systems market. The judge ordered a series of behavioral remedies and decreed that Microsoft should be split into two companies -- one for its operating systems, the other for the rest of its software products.

However, Jackson stayed the breakup as well as the other remedies while Microsoft appeals his ruling. The Court of Appeals, which began its proceedings after the U.S. Supreme Court decided not to directly hear the appeal (see story), is due to begin receiving written arguments from the two sides next month and has scheduled oral arguments for next February.

Jackson still could be involved in the case if the appellate court decides to send it back to him. As a result, he has received some criticism for publicly commenting on the case. But Jackson today said that he didn't speak out until after his ruling was issued and has maintained his silence on the merits of the government's case against Microsoft.

His goal in speaking out now is to help the public understand the role of the judiciary in regulating the software market, Jackson said. But he added that the image of himself as a regulator isn't one that he likes. Jackson said he admires Microsoft's founders and never viewed the case as a contest between himself and Bill Gates, Microsoft's chairman and chief software architect.

While Jackson acknowledged that his rulings could be vulnerable now that the matter is before the appeals court, he said the Microsoft case could lead to new governing processes for antitrust investigations involving technology vendors. "I expect [there] will emerge a new rule of law [that will spell out] a governing process in cyberspace," Jackson said.

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