Appeals court tosses out MS antitrust ruling

Appeals court tosses out MS antitrust ruling

The US Court of Appeals for the District of Columbia Circuit has sent back to a lower court US District Court Judge Thomas Penfield Jackson's decision in the government's landmark antitrust case against Microsoft.

The court also ruled that another judge should handle the case. It vacated Jackson's remedy of breaking up the company, but upheld the finding that Microsoft illegally tried to maintain a monopoly in operating systems.

The ruling said in part: "We vacate the Final Judgment on remedies, because the trial judge engaged in impermissible ex parte contacts by holding secret interviews with members of the media and made numerous offensive comments about Microsoft officials in public statements outside of the courtroom, giving rise to an appearance of partiality."

In June of last year Jackson ordered the breakup of Microsoft into two separate companies, with one focused on operating systems and the other on software applications. The DOJ and 17 of 19 state attorneys general that are plaintiffs in the case had recommended that ruling. Jackson further ordered a variety of behavioral remedies meant to curb, according to the government allegations, Microsoft's illegal use of its operating system monopoly to further its dominance in IT. The breakup and remedies were "stayed" while the appeals process continues.

Jackson ruled before he issued the breakup order that the company is in fact a monopoly and has used that power in violation of the Sherman Antitrust Act. It's not illegal under US law for a company to be a monopoly. What is illegal is using that status to, among other things, squelch the competition.

The judge's harshest sentiments were not, however, conveyed in his written court rulings. In public speeches and interviews with reporters, Jackson expressed his views on the case and regarding both DOJ and Microsoft attorneys and personnel. He likened Microsoft chairman Bill Gates to Napoleon.

Such comments didn't sit well with officials in Redmond. Microsoft urged the appeals court to consider the judge's remarks and that panel did, rebuking Jackson for offering his thoughts on the case. While judges certainly form opinions, if all of them spoke publicly "the system would be a sham," chief judge Harry Edwards said during two days of oral arguments before the appeals court, which included time to consider the "conduct of trial and extrajudicial statements."

During the arguments, Edwards also had a sharp exchange with Jeffrey Minear, an attorney from the Office of the Solicitor General defending the breakup order, casting doubt on government's contention that Microsoft exhibited monopolistic, anti-competitive behavior against Web browser developer Netscape Communications by attacking its business.

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