DoJ to seek charges against Microsoft
Published: 06 Dec 1999 15:35 GMT
The Justice Department and 19 states are expected to jointly ask the federal judge in the Microsoft trial to find two violations of Section 2 of the Sherman Act, for illegally protecting and extending the Windows software monopoly, and a third violation for illegal business practices under Section 1 of the act. A separate filing by the 19 states is expected to seek further charges under state laws.
Even as the trial moves forward in U.S. District Court here, separate settlement talks are expected to intensify this week after a court-appointed mediator, Judge Richard Posner of the U.S. Court of Appeals in Chicago, set an aggressive schedule of three rounds of talks over the next two weeks, people on both sides of the case said.
In the settlement talks, some people in the government camp are expected to press for a restructuring of the company to prevent a recurrence of the predatory acts found by Judge Thomas Penfield Jackson in his Nov. 5 preliminary ruling in the case. Microsoft and the industry will be better off with decisive structural changes, even a breakup, than with the prospect of complex restrictions on business practices that would require continuing court oversight, they say.
One sign that the government might seek a structural settlement came last week with the disclosure that it had retained a Wall Street investment banker to help evaluate its options in either a settlement or court-ordered remedy. Microsoft has flatly rejected any breakup, however. Although both sides say they will try again to settle the case, they remain far apart, and the odds of a settlement are slim.
In the court filing planned Monday, the government is expected to centre its claims around a Sherman Act Section 2 charge of "monopoly maintenance," in which Microsoft undertook illegal acts to protect its dominance of operating software. A second Section 2 charge will allege attempted monopolisation of Internet software. A third set of charges, under Section 1 of the act, cites some otherwise-common business practices, such as exclusive contracts, that the government will allege are illegal because Microsoft has a monopoly.
A Microsoft spokesman countered that Judge Jackson's findings don't support the government's expected Section 2 claim of attempted monopolisation, or the Section 1 business-practices charges. In the Nov. 5 ruling, which overwhelmingly favoured the government, the judge did find evidence lacking for some claims.
For example, the judge says that "there is insufficient evidence to find that the requirements that Microsoft sought to impose with respect to the use of Microsoft-specific browsing technologies had any discernible or deleterious impact" on the market share of rival Internet browsers. He also says that America Online Inc.'s acquisition of Microsoft's browser rival, Netscape, makes it less likely Microsoft will succeed in monopolising Internet browsers.
"Although the suspicion lingers, the evidence is insufficient to find that Microsoft's ambition is a future in which most or all of the content available on the Web would be accessible only through its own browsing software," Judge Jackson wrote. He goes on to say, though, that "evidence reveals an intent" to protect Windows from the shift of a growing number of software programs to the Web.
Indeed, the judge's Nov. 5 findings show that the monopoly-maintenance count may be the most serious charge Microsoft faces.
Microsoft has said that it doesn't have a monopoly and faces many competitive threats and that technology and the market are moving too quickly to allow anyone to achieve a lasting monopoly. In response to the specific monopoly-maintenance charge, Microsoft will likely argue that even monopolists may compete aggressively.
It will likely cite one opinion from the 7th Circuit Court of Appeals -- where Judge Posner sits -- that said that even a legal monopoly shouldn't have to pull "its competitive punches." A second appellate opinion, from 1983, also lends some support, finding that "a monopolist, no less than any other competitor, is permitted and indeed encouraged to compete aggressively."
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