Microsoft Appeals Breakup Ruling

Lawyers for Microsoft Corp. and the Justice Department endured a bruising, all-day grilling by appeals court judges today, as they debated whether the software giant is an abusive monopoly that blocked competition.

In afternoon arguments, the seven justices of the U.S. Circuit Court for the District of Columbia took a deeply skeptical view of government lawyer John Roberts' argument that Microsoft Internet Explorer and Windows were two products illegally tied together so Microsoft could leverage its monopoly on desktop operating systems to take over the market for Internet browsers.

Microsoft lawyer Richard Urowsky argued that Explorer was an integral part of Windows, an opinion several of the justices took up in grilling Roberts.

"It's almost like you're saying, 'I'd like to buy a clock radio without a clock,'" Judge A. Raymond Randolph said.

The argument on tying together the two products closed the first half of two days of oral arguments in Microsoft's appeal of U.S. District Court Judge Thomas Penfield Jackson's June 2000 ruling that Microsoft is an abusive monopoly. Jackson later ordered the company be broken in two.

"They were not probing Microsoft's position very hard, less hard than I would have expected them to do," said Donald Falk, an antitrust lawyer with Meyer, Brown & Platt in Washington who was watching the proceedings.

But the judges' attitudes today shouldn't be scrutinized too closely, Falk said. It's written briefs, not oral arguments, that usually win a case in an appeals court, he said.

"Oral argument usually isn't what turns the scale, unless there's some very telling point that comes out," he said.

Microsoft vs. Netscape

Earlier, Urowsky maintained the company didn't stop distribution of competing Web browser Netscape, and that the inclusion of Internet Explorer as part of the Windows operating system didn't stifle competition.

"Netscape had unfettered access to consumers," Urowsky said, adding that Microsoft's No. 1 competitor in the Web browser market had more than 30 million customers by 1998.

The inclusion of Internet Explorer as part of the Windows operating system didn't stifle competition, Urowsky told the justices during his part of the arguments.

"It resulted in improvements to the [operating system] that benefited consumers, and second, it did not prevent distribution of competing Web browser software," he said.

But government lawyer Jeffrey Minear argued that Microsoft conducted a campaign against Netscape ultimately designed to protect its own Windows desktop operating system monopoly.

"Microsoft took extraordinary steps and spent extraordinary revenue to prevent consumers from selecting certain innovative technologies, such as Navigator and Java, that in time could weaken the application's barrier to entry that protected the operating system's monopoly," he said.

Bruising Grilling

All seven judges of the D.C. Circuit Court of Appeals peppered both lawyers with questions. With Urowsky, they took a dim view of his alleged attempt to re-argue the basic facts of the case. With Minear, they focused on whether he could show that Microsoft's business practices really hurt Netscape, especially in cases where computer manufacturers were allowed to put both browsers on their machines. Perhaps Netscape just wasn't equipped to compete, they speculated.

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