By Rachel Chalmers
In a 37-page brief filed with Judge Thomas Penfield Jackson, the US Department of Justice and nineteen states have argued that Microsoft Corp has violated US antitrust law in at least four ways. The government’s charges are based on the judge’s own Findings of Fact in the case. First and most comprehensively, the DoJ says that Microsoft illegally maintained the critical barrier to entry into the Intel-based PC operating systems market where it held a monopoly. Second, Microsoft stands accused of illegally tying Internet Explorer to its Windows operating system. Third, the DoJ contends that Microsoft entered a variety of illegally exclusionary agreements with OEMs, ISPs and online service providers. Finally, the DoJ argues that Microsoft’s campaign to impair Netscape’s competitive access to consumers was an unlawful attempt to extend its monopoly to the browser market.
These claims, though legally distinct, are closely related, the DoJ noted. The tying agreements and exclusionary agreements violate Section 1 [of the Sherman Act], but they are also part of the pattern of acts that violate Section 2 and would, indeed, be illegal monopolizing acts under Section 2 even if not illegal restraints of trade under Section 1. This Court should conclude that Microsoft’s actions violate both Section 2 and Section 1 of the Sherman Act and proceed to consideration of appropriate remedies.
Not everyone was swayed by the DoJ’s argument. Reading the federal government brief I found that its arguments and its presentation were less compelling than the judge’s own Findings of Fact, said Rich Gray, a Silicon Valley attorney who has closely followed the case. It made it very clear to me just how important it is for the government to prevail on appeal in regards to its tying argument, if they are to obtain any severe remedy. To Gray, the question of whether or not Microsoft tied IE to Windows is the crux of the case. If Microsoft did engage in tying, the government is justified in seeking a severe remedy. But if the government cannot prove that IW and Windows were illegally tied, Gray does not believe the rest of the case will support the kind of remedy the government wants to see applied.
I still think Jackson has given the government enough ammunition to win on the tying issue on appeal, he admitted. The question is whether the DoJ can capitalize on that advantage. So far, Gray says he has seen no evidence that it can. It just didn’t grab me as far as a visceral reaction goes, he told ComputerWire. When I read the Findings of Fact, I said to myself, ‘Wow this is a huge loss for Microsoft.’ To Gray, the latest filing lacks that force. The problem is that some of their theories aren’t strong enough to stand on their own, he argued. Their brief demonstrates some of the weaknesses of their case more than the findings of fact did.
