Appeals Court Turns Up Heat on DOJ

Yesterday, Microsoft's antitrust appeal got off to a rosy start as a panel of appeals court judges grilled Department of Justice (DOJ) lawyers about how they handled the case. One appellate justice even attacked the basic premise of the case against Microsoft, which might be a revealing indicator of how the court will eventually rule. Microsoft is trying to overturn its massive defeat at the hands of Judge Thomas Penfield Jackson, who ruled last year that the company should be broken into two competing corporations. After only a day in court, Microsoft's prospects have already brightened considerably.
Chief Justice Harry Edwards said that he doubted whether the Web browser market, which was at the heart of the DOJ's case, represented an important enough market to warrant breaking up Microsoft. Web browsers, he said, "lack the capacity to serve as middleware platforms." And although Netscape's browser might have eventually grown to serve in this capacity, he said, he saw nothing in the court record that proved Netscape Navigator was ever a Windows competitor. He quoted then Netscape CEO James Barksdale, who said that Netscape was "not in the middleware business."
The court grilled DOJ lawyers about the differences between procompetitive and anticompetitive behavior. "If Microsoft used its monopoly power to put a grocery chain out of business," Edwards asked, "would that violate federal antitrust law?" Assistant Solicitor General Jeffrey Minear said that Microsoft's illegal business practices stymied companies such as Sun Microsystems and Netscape. Sun, he said, wasn't able to gain widespread support for its platform-independent Java programming language. That comment didn't satisfy the panel of judges at all.
"You are still very vague \[about\] what \[competitive\] methods are permissible," one justice responded, and Edwards refused to listen to arguments that Microsoft tried to "crush" both Netscape and Java. Of course Microsoft would want to compete aggressively, he said, as any company would. Edwards said that replacing one monopoly--Microsoft--with another wouldn't solve any problems. The government's solution, he said, virtually assures such an outcome. "This case ultimately is about whether the Microsoft Windows Internet Explorer (IE) monopoly should be replaced by Netscape-Sun-AOL," Edwards said.
Microsoft didn't get off without a few embarrassing moments, however. When Microsoft attorney Richard Urowsky tried to argue that the company doesn't possess monopoly power, the court quickly shot him down; both Windows and Office command more than 90 percent of their respective markets and have no viable competitors. Urowsky also lost points with the judges for continuing the argument that it's "impossible" to remove IE from Windows. "I'm not buying that \[argument\] for a minute," Edwards scoffed. "It's not technically complicated at all."
Today, Microsoft and the DOJ will continue their 2-day opening session with the Appeals Court

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