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Yes, there’s a stay and an appeal, but the final judgment as to remedies is in. U.S. District Judge Thomas Penfield Jackson of the District of Columbia found that Microsoft violated antitrust laws and, as a result, decided June 7 that Microsoft should be broken into two separate companies — one for its operating systems products and one for its individual, network, and Internet applications. Whatever the final outcome, there is little denying that the Internet business has been changed by the trial and the rulings�both by their interpretations of law and by their high profile. The Internet Newsletter, a Law.com affiliate, asked prominent attorneys in the field to comment on the case and its implications for Internet-related law. Stewart Baker, Steptoe & Johnson LLP, Washington, D.C. Of course, both sides have been right all along. Microsoft is — as the Department of Justice says — building what can only be described as an effective monopoly. But this monopoly is — as the company fears — a highly unstable one that could be overturned quickly if the company doesn’t respond aggressively to competitive threats, if it doesn’t do a good job of standardizing and commoditizing new software capabilities. In essence, we’ve let Microsoft set desktop standards and keep some monopoly rents for doing so. The alternative is dueling standards, which everyone hates worse. (And for good reason. I can’t tell you how many audio/MP3 jukebox programs have tried desperately and sneakily to turn themselves into my default player in the last month.) So it begins to look as though standard-setting in an evolving industry is a natural monopoly. Perhaps we can get the benefits of Microsoft’s standard-setting at less cost, and that’s what the remedy is struggling to find — a way to let MS set standards without becoming too powerful. But of course no one really knows whether this can be done, or how, and the remedy as proposed is a blunder buss — trying conduct remedies, opening of APIs, and cutting the baby in two, perhaps on the theory that one or the other is bound to work. It’s a vast experiment, and a rather risky one. We might end up with our standards set by a humbler and less profitable version of Microsoft — or the company might lose the whole franchise to someone nimbler and less antitrust-ridden, much as Microsoft was when it ate IBM’s lunch in this field. That’s a big gamble. If we didn’t like it when Microsoft was setting consumer software standards, will we like it better if the torch is passed to, say, Sony? Mike Godwin, Senior Legal Editor, E-Commerce Law Weekly My own view is that the Jackson rulings, both substantive and procedural, are pretty upholdable. I’ve heard some complaints that the final memorandum and order are deficient because they don’t rely on legal citations, and because they’re too cavalier in adopting the government’s rationale and remedies. But many of the things complained about with regard to Judge Jackson’s order strike me as ingenious. The order as written is a much smaller target than it would be if it had been filled with citations to caselaw (which, in any case, would not be stunningly helpful in so unprecedented a case as this one). As the judge in charge of this case, Judge Jackson is in some ways himself a primary authority as to what’s significant about it, and arguably has less need to depend on other authority. While not as obviously clever as Judge Jackson’s dividing up the findings of fact and conclusions of law, the memorandum and order, taken together with the findings and conclusions, begin to look more unassailable, at least from a legal standpoint. Richard Lazarus, Director Of Georgetown University Law Center’s Supreme Court Institute, Quoted In Legal Times This is a strong candidate [for immediate Supreme Court review]. It does present a novel issue in an important context. Normally, the Court might let this type of thing percolate a number of years. And if Microsoft was requesting it, they might not grant it. But with the U.S. government requesting it, this is not a slam dunk, but certainly a very good chance. Any appeals court will tend to be very deferential to the findings of fact by the district judge. That deference is something that a conservative justice would endorse. On the remedy as well, they tend to be deferential. The conclusions of law, though, they will review de novo. Attorney Stephen Paul Mahinka, A Partner In The Washington, D.C., Office Of Morgan, Lewis & Bockius, Quoted In The New York Law Journal The first question is, does the law support the decision? The answer there is, not very strongly. It is very difficult to justify this kind of remedy given the case that was argued. [When AT&T was broken up] we had a judge become the telecommunications czar. Do we want Judge Jackson to be running the computer industry for the next 20 years? Microsoft Chief Counsel Bill Neukom, Quoted In E-Commerce Law Weekly We will be seeking reversal of many factual findings that were clearly in error. We will be seeking review of many key legal issues where the court has disregarded established legal precedent. And we will be pointing out numerous procedural irregularities that had the effect of denying Microsoft its due process rights. The government’s breakup and regulation plan will impose huge costs and burdens on Microsoft and our customers almost immediately. We’re asking the courts to stay this judgment so that the appeal can go forward quickly without unnecessary disruption to the company, to consumers, and to the high-tech economy. This kind of stay is common when a judgment would impose irreversible harm and the appellant has raised serious issues, as we have in this case. Rep. Richard A. Gephardt, D-Mo., From June 8 Press Conference I don’t know [what my reaction is]. I admire the company, I admire what they’ve done. I think they’ve done a lot of good things. But I also believe it’s important to have antitrust laws. I don’t think that these laws should be repealed. I think you’ve got to apply them in a new situation. These are not — you know, this isn’t Standard Oil in 1910 or the telephone companies in 1970, this is a different deal. But I don’t think that the basic need for antitrust laws has disappeared, and I think what we ask the judicial system to do is to apply those laws to the modern circumstances. And I don’t want to second-guess the judge or the court or what the Court of Appeals or the Supreme Court is likely to do with this case. I think we shouldn’t be getting into this politically. I don’t think we ought to be trying to affect the outcome. I think we ought to let the court system handle this; that’s their responsibility and their job. Rep. Joe Scarborough (R-Fla.) [This] unfortunate decision impairs technological innovation. It is incompatible with today’s Internet economy and inconsistent with past rulings by the federal court of appeals. Portland Press Herald, Editorial, June 9 Whether U.S. Judge Thomas Penfield Jackson’s decision to break up Microsoft Corp. on anti-trust grounds is upheld on appeal, most legal experts agree that there will be some sort of court-ordered change in the way the software giant does business. Jackson’s ruling was unsparing in its criticism of Microsoft. It found that the company abused its monopoly power to the detriment of competitors and consumers. As a result, he ordered that the company be split in two. One entity would oversee production and sale of Windows, the basic set of commands that runs most of the world’s personal computers. The other company would design and sell applications such as word processing, spreadsheets and Internet browsers. The plan is justified and should be expedited directly to the U.S. Supreme Court. Microsoft has shown itself willing to leverage its Windows monopoly to strangle competition and that’s a problem that warrants fast-track treatment. No one really knows if there could be a better word processing program than Microsoft Word, for instance, because software designers aren’t going to put capital at risk trying to compete with a monopoly.

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