Microsoft Appeals Antitrust Case to Supreme Court

By Peter Galli  |  Posted 2001-08-07 Print this article Print

Microsoft Corp. said on Tuesday it has asked the U.S. Supreme Court to reconsider an appeals court ruling that the company abused its monopoly in PC operating systems.

Microsoft Corp. said on Tuesday it has asked the U.S. Supreme Court to reconsider an appeals court ruling that the company abused its monopoly in PC operating systems.

In a separate legal filing, Microsoft also asked a federal appeals court to delay an order that would send the case back to a lower court to determine what remedies should be imposed against the company to prevent future antitrust violations.

In its petition for Supreme Court review, Microsoft attorneys argued that the U.S. Court of Appeals for the District of Columbia should have thrown out all the conclusions reached by the lower court judge, Thomas Penfield Jackson, because Jackson appeared biased and granted secret interviews with reporters in the midst of the trial.

But the Redmond, Wash., software giant also kept the door wide open for a negotiated settlement with the government and the 18 state attorneys generals involved in the antitrust action against it.

Microsoft spokesman Vivek Varma told eWEEK Tuesday that "we will continue to work to resolve the remaining issues in the case through settlement, but we are seeking Supreme Court review of this important issue."

In its filing to the Supreme Court, Microsoft noted that the Court of Appeals in Washington had recently ruled that Judge Jackson had violated a federal statute and three separate canons of the Code of Conduct for United States Judges, designed to ensure the impartiality of the judicial process.

"On that basis, Microsoft argues that the district judge should have been disqualified from any further role in the case as of the time the earliest violation occurred," the company said, adding that the "disqualification issue is important to restoring public confidence in the integrity of the judicial system."

Microsoft also filed a motion requesting that the D.C. Court of Appeals hold its order that another District Court judge hear the outstanding issues in the case. "This is a common legal practice when filing a Supreme Court petition. It is now up to the Appeals Court to decide whether to allow this," Varma said, declining to comment further.

Petition dubbed a long shot

Stewart Gerson, a partner at law firm Epstein, Becker and Green in Washington, told eWEEK that the petition was a "long shot" as the Supreme Court accepted few such petitions. While the court is currently in recess and reconvenes the first Monday in October, it could issue a decision to accept or deny the petition before then. But Gerson said the high court would most likely only do so in October.

As to why he thought Microsoft had petitioned on the basis of Jacksons bias, Gerson said it was a matter of "going in with its strengths. I was surprised that Microsoft didnt throw in the tying claim for review as well, but this could have been a strategic decision given that the court doesnt hear multiple-issue cases."

The move could also favor Microsoft as it moves to release Windows XP on October 25. There have been numerous legal actions against the company with regard to Windows XP, and calls for a delay in its release are intensifying.

But all of this becomes moot if Microsoft, the government and the 18 attorneys general involved in the case reach a negotiated settlement, something Gerson does not rule out. "I am still someone who thinks that a settlement is certainly still in the cards at some time, so you have to factor that in," he said.

Failing that, whether the Supreme Court takes the matter or not, the matter would be referred back to the District Court and a new judge for additional review. "If the Supreme Court denies this petition, the case still goes back to the District Court for a hearing on the tying claim and the remedy," he said.

"And if the Supreme Court throws out Jacksons initial findings and judgement on monopolization, it will then simply remand the case to the District Court to be reheard all over again," Gerson said.

A Hail Mary?

The latest legal moves follow a unanimous D.C. Appeals Court ruling in late June that Microsoft Corp. employed anti-competitive means to maintain its monopoly in the operating system market, and the refusal by that court this month to reconsider that finding.

Microsoft critics like Ed Black, president of the Computer & Communications Industry Association in Washington, which submitted a "friend of the court" brief against Microsoft in the District Court trial, were also quick to respond to the petition.

Black said in a prepared statement that "given the mountain of evidence and overwhelming findings of both the District Court and the unanimous Circuit Court, it is hardly surprising -- but quite telling -- that Microsoft is not appealing any substantive matter in the decision to the Supreme Court.

However, it was "unusual that a party claiming such a resounding victory in the wake of an appeals courts decision would seek to have the entire lower court decision vacated. Clearly, this is no more than a Hail Mary to the Supreme Court and an effort to delay further the proceedings in the case," he said.

Barring any delays, the appeals court is scheduled to send the case back to a lower court later this week, where a judge will decide on remedies and reconsider whether the company illegally tied its Internet Explorer browser into the Windows operating system.

The timing for moving the case could be crucial for Microsoft, which is due to roll out its new Windows XP operating system, jam-packed with new features, in October.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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