Article 40 of 352
High court gives Gates a pass Supreme Court declines to review government's case againstMicrosoft
Alan T. Saracevic
San Francisco Examiner
Page D-1
(Copyright 2000)

Somewhere near Seattle, Bill Gates is smiling.The Supreme Court said Tuesd ay it would pass on the chance to hear the government's antitrust suit against M icrosoft. As a result, Gates and company are now headed back to the familiar U.S . Circuit Court of Appeals for the District of Columbia.

Twice before, this very court overturned rulings from lesser courts regarding antitrust charges against Microsoft. Gates is hoping to go three for three.

That court "has a generally non-interventionist policy," said Nicholas Economides , a professor of economics at New York University's Leonard N. Stern School of Business. "That's because the Washington court of appeals has in the past ruled that Microsoft could include in their operating system any functionality it wanted."

Of course, the government is hoping the third time is the charm. Since 1998, the Department of Justice has been working overtime to prove Microsoft has abused its dominant market position by bundling products into its Windows operating system and forcing computer makers to exclude competitors.

Joined by 19 state attorneys general, the Justice Department

won a major victory earlier this year when U.S. District Judge Thomas Penfield Jackson ordered Microsoft to split itself into two companies because it had violated antitrust law.

Now, the government's victory hangs in the balance.

Microsoft CEO Steve Ballmer appeared on TV within minutes of the announcement Tuesday to express his delight about the higher court's action.

"We're glad to have a chance to present (our position) to the appellate court," Ballmer said.

Justice Department spokeswoman Gina Talamona was less jubilant, saying, "We look forward to presenting our case to the court of appeals as expeditiously as possible."

According to the experts, there's little chance that anything will be decided expeditiously. Most observers feel the appellate process could delay the case another year, or even two.

Economides expects the appeals court to overturn Jackson's ruling and send the case back to the federal judge with instructions to hold hearings on possible remedies to the situation.

"Judge Jackson's remedy did not have enough procedure," Economides said. "He made up his

mind in one day. It's the biggest weakness in his ruling. He just took the DOJ suggestion for a remedy and imposed it. This is not the way things work."

"In complicated business matters, there needs to be more discussion," Economides said. "They will send it back to Jackson and ask him to do a more in-depth analysis of the remedy."

There's also the possibility the case will be affected by the upcoming presidential elections, Economides said. A newly elected president, especially a Republican, would change the makeup of the Justice Department and push for a settlement.

If no settlement is reached, one thing is certain: another round of appeals. Ironically, whichever way the appeals court rules, the other side is bound to ask the Supreme Court to take up the case again.

Microsoft's supporters are confident the software giant will fare well in any court other than Jackson's.

"I think that Microsoft is well prepared to argue their case before the Supreme Court or the appellate court," said Jonathon Zuck, president of the Association for Competitive Technology, a pro- Microsoft trade association representing over 9,000 information

technology companies. "Either one of the courts will recognize the huge majority of this case has been rendered moot by advancement in technology."


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