Microsoft has little chance with appeal, experts say

Microsoft's appeal of a federal judge's decision to limit the company from linking its Windows 95 license to Internet Explorer appears to have little chance of success, according to antitrust experts interviewed yesterday. Microsoft is fighting the preliminary injunction imposed by U.S. District Judge Thomas Penfield Jackson while a special court master reviews the US Department of Justice's complaint that the software giant has violated a 1995 consent decree on anti-competitive business practices. Jackson was wrong to impose the injunction because he denied the government's petition to hold Microsoft in contempt, lawyers for the company argued on Monday.

Microsoft's appeal of a federal judge's decision to limit the company from linking its Windows 95 license to Internet Explorer appears to have little chance of success, according to antitrust experts interviewed yesterday.

Microsoft is fighting the preliminary injunction imposed by U.S. District Judge Thomas Penfield Jackson while a special court master reviews the US Department of Justice's complaint that the software giant has violated a 1995 consent decree on anti-competitive business practices.

Jackson was wrong to impose the injunction because he denied the government's petition to hold Microsoft in contempt, lawyers for the company argued on Monday.

In its motion to expedite the appeals process, Microsoft said Jackson's actions had left a cloud of uncertainty over Windows 98, the successor to Windows 95 that will further integrate the browser with the OS. The judge said his injunction would apply to future versions of Windows 95, a matter of contention with Microsoft.

Third-party developers and original equipment manufacturers (OEMs) are counting on Windows 98 to ship in the second quarter of 1998, as promised by Microsoft, company officials contended.

“Indeed, significant segments of the United States' economy may be affected by doubt surrounding the release of Windows 98,” Microsoft officials stated. “That this possibility exists is vividly demonstrated by the precipitous decline in the Dow Jones Industrial Average (15 points in a matter of minutes) when rumors circulated in late June 1995 that Microsoft had delayed the release of Windows 95 to computer manufacturers.”

While Microsoft sought a speedy resolution, many experts said their appeal probably would be denied.

“The chance of (Microsoft) prevailing on this point is relatively remote,” said William Kovacic, an antitrust law professor at George Mason School of Law in Arlington, Virginia. “The judge did a pretty careful job of addressing the positions of both parties, and he used a fairly cautious approach in resolving the matter,” he added.

“The reviewing court will give the judge a substantial degree of discretion. Microsoft has to bear a very heavy burden of proof. Litigants traditionally have limited success” in such appeals, Kovacic said. A panel of judges from the U.S. Court of Appeals eventually will hear Microsoft's argument that Jackson inappropriately expanded the case beyond the scope of the Justice Department's petition.

“Even if the court's view is to the right of what the judge's actions are, on procedural grounds it is unlikely that the court will reverse this decision while the District Court is still trying to find all the facts,” said Simon Lazarus, an antitrust lawyer with the Washington, D.C., law firm Powell, Goldstein, Frazier & Murphy.

Like Jackson, most members of the Court of Appeals are appointees of Republican former President Ronald Reagan.

Jackson named visiting Harvard School of Law professor Lawrence Lessig a special master, charged with deciding if Microsoft has broken antitrust laws. Jackson did not rule that Microsoft has violated the 1995 antitrust consent decree, and refused to implement a US$1 million-per-day fine sought by the federal government.

Microsoft pleaded its case on the Internet at http://www.microsoft.com/corpinfo/, saying that the browser has become a critical, integrated part of Windows. The company claimed that several applications — including The Microsoft Network, Lotus Notes 4.6, Money 98, Prodigy, Quicken 98 and America Online — “will not run properly without the Windows 95 system services provided by Internet Explorer.”

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