In its last defense before a federal judge hands down a decree in the landmark Microsoft Corp. antitrust trial, the company called the Justice Department’s plan to dismember the company “extreme and unjustified.”
In its 42-page response to the revised breakup plan filed last week by the federal government and 17 of 19 states suing the world’s dominant software company, Microsoft repeatedly pointed out what it viewed as technical flaws in the government’s proposal to divide Microsoft into two companies.
In April, U.S. District Court Judge Thomas Penfield Jackson ruled that Microsoft enjoyed a monopoly in its industry–which is not against the law–but used its power illegally to stifle competition. There has been speculation that Jackson could hand down an order to dismantle the company as soon as this week.
But legal experts said the serious, detailed nature of Microsoft’s analysis could be enough to keep Jackson from acting so soon. They said Jackson would probably need more time to assess Microsoft’s filing as he drafted his order.
Microsoft also took issue with the government’s assertion in its filing that the company was cynically trying to win favor with any appeals court that might later hear the case by complaining that Jackson did not grant the company enough time to argue against a breakup.
“This accusation is baseless,” Microsoft said in its Wednesday filing. “Suffice it to say that it was Microsoft’s position and understanding that the hearing on May 24, 2000, was to be the beginning–not the end–of proceedings on the issue of relief. Microsoft believed, and still believes, that its position and understanding were well-founded in both law and fact.”
Some of Microsoft’s suggested changes seemed to some to be cosmetic. In its revision of the government’s proposed remedy, Microsoft crossed out the government’s word “reorganization” and substituted “divestiture.”
Other recommended changes seemed more substantial. For instance, Microsoft asked that the judge give it 12 months to produce a detailed blueprint for the breakup instead of four months as the government requested.
The government has asked the judge to break Microsoft into two companies. One would oversee the company’s Windows operating system, the fundamental software that currently runs more than 90 percent of the world’s personal computers. The other would manage the company’s applications products such as the productivity software named Microsoft Office. The second company would also oversee Microsoft’s Internet Explorer browser and MSN Internet service provider.
The company asked for the additional time to handle the complexity of a breakup. “The forced breakup of a unitary company like Microsoft is unprecedented, and dividing the company in half would be an enormously difficult task,” Microsoft’s lawyers wrote. They mentioned Internal Revenue Service, Securities and Exchange Commission and Department of Labor considerations, among others.
Microsoft so thoroughly “flyspecked” –in the word of one legal observer–the government’s document, it corrected typographical errors and argued for different wording in the nitty-gritty of technical and legal language.
Microsoft indicated, as it has in the past, that it was looking beyond Jackson’s decree and eyeing the appeals courts. “`We are offering these edits with the obvious caveat that we do not believe that such an extreme and damaging remedy would be sustained by the appellate process,” said Jim Cullinan, a Microsoft spokesman, in an e-mail sent to reporters.
Microsoft’s microscopic assessment of the government’s filing made Robert Lande, an antitrust law expert and professor at the University of Baltimore Law School, doubt seriously that the judge would issue his decree this week.
“I can’t believe he would issue the decree this week because [Microsoft’s response is] a well done document,” he said. “The judge has got to take it seriously. I don’t see how he cannot take it seriously.”
William Kovacic, a law professor at George Washington University, agreed that if the judge views Microsoft’s document with respect, he might take more time, not less, to craft an order that could hold up to appellate scrutiny.
But he noted that Jackson surprised many last week when, clearly impatient with Microsoft, he abruptly declined to give Microsoft additional time to argue against its breakup.
Jackson, Kovacic said, gave him the impression that the judge might not be much bothered if a reviewing court upheld his ruling that Microsoft misused its monopoly in the software industry to violate the nation’s antitrust laws but remanded the remedy part of the trial back to the judge for further hearings.
“I wonder if he’s going to say, `Give me the government’s order. Where do I sign?'” Kovacic said. “I don’t think that’s the best way to do it, but he very much acts like a man who’s got a train to catch.”
