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January 25, 1998

MICROSOFT VS JUSTICE, ROE VS WADE & CLINTON VS HIS HORMONES

By CBR Staff Writer

Washington DC was a strange place to be last Thursday. President Clinton was holed up at home working out how he was going to wriggle out of the latest sex scandal confronting him, while thousands of anti abortionists were in town ‘commemorating’ the 25th anniversary of the Roe vs Wade landmark case that brought about the current US abortion laws and blocking roads and raising the ire of the normally-polite Washington drivers. And over in District Court Room number two, journalists, law students and curious onlookers crammed inside to see how Microsoft Corp could wriggle out the contempt allegations brought upon it by the Department of Justice. While Clinton will probably battle with his opponents until the end of his term, and the anti-abortionists will probably never get everything they want – at least not in the US – Microsoft and the Department of Justice appeared, on the face of it to have come to an amicable agreement. After just three minutes, Judge Thomas Jackson dismissed the court and the media scrum rushed out to the street where both Bill Neukom, Microsoft’s senior VP for law and corporate affairs, and Joel Klein, the assistant attorney general at the Antitrust division both expressed themselves pleased with the settlement, although only Klein called it a victory and said it went beyond what we requested. Then it was off to the grand, if slightly pompous surrounding of the National Press Club – celebrating its 90th birthday that day incidentally – to hear a more detailed version of Redmond’s side of the story.

By Nick Patience

While never outwardly hostile, the mood among journalists was one of frustration at the software company. If the company is now going to offer alternative versions of Windows 95 minus the browser functionality – or at least with it hidden – why didn’t it do it before, they demanded? We honestly believed we were complying with the court order. We were ordered to remove, not hide Internet Explorer, said Microsoft chief operating officer Bob Herbold. This case is not about consumer choice – PC manufacturers have always been able to install Netscape Navigator. It’s about freedom to innovate, not freedom of choice, he gushed. It seemed a lot of people were campaigning on the issue of freedom of choice in Washington last Thursday. What is more interesting than Windows 95, and the unlikely event that PC makers are really going to be willing to pay the same OEM fees for Windows 95 with half-baked versions of IE installed, is what it all means for Windows 98, which is slated for June. We got the impression Microsoft was worried about meeting the timetable, and with good reason. The court’s appointed special master, Harvard Law School professor and internet law expert Lawrence Lessig as is not due to submit a report to the judge until May 31. And Microsoft’s appeal against the preliminary injunction that was at the heart of last week’s hearing is due on April 21. The browser metaphor is said to run right through Windows 98 and thus any definitive ruling forcing Microsoft to separate browser from operating system is likely to cause chaos at Redmond. A cynic might suggest that any uncertainty – whether genuine or manufactured – would provide Redmond with a perfect reason for delaying the release of the operating system. However any uncertainty could also start hitting Microsoft’s – and possibly PC manufacturers’ – bottom lines as consumer hold off until the fog clears. All Herbold would say is that Windows 98 is steady as she goes. We have our eyes on the schedule and it’s unclear what the implications are at this juncture. The appeal, however, could change everything, if successful.

Two points at issue

There are two points at issue. First, Microsoft is asking the appeal court to rule that last week’s preliminary injunction – forcing it to provide Win 95 minus a browser – comprises the entirety of the government’s case against the company. After all, says Microsoft Judge Jackson has already dismissed the government’s petition to force Microsoft to alter its non-disclosure agreement with OEMs. The agreements, which Microsoft described as industry standard, requires the OEMs to inform Microsoft before providing any information to state or federal antitrust investigators. Therefore, Redmond is asking the appeal court to says that Judge Jackson is going beyond the original government petition by continuing with the case. Secondly, Microsoft is appealing because it says the judge did not give it prior notice of the preliminary injunction. It says normal proceedings would require the judge to inform the company of his intention and give it the opportunity for a discovery period, in which the two sides exchange evidence. Redmond says this did not happen with the December 11 preliminary injunction. So, it may be one-nil to the Department of Justice, but Microsoft must be hopeful for a at least a tie, if not a come-from-behind victory, but it all hinges on the company’s appeal. Meanwhile, across town, the President was trying to rally his supporters around him to refute allegations of sexual misconduct with Monica Lewinsky, and the anti-abortionists, were still clogging up traffic and the train station and intimidating passers-by with their fierce-looking placards and bewildered-looking children, brought along to make the ultimate point, no doubt. Perhaps it wasn’t such a strange day in Washington after all.

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