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The Justice Department, 19 states, and the District of Columbia filed a 150-page brief in a federal appeals court last Friday arguing that a district court’s order breaking up the software giant for multiple antitrust law violations should be upheld. Government lawyers also dismissed Microsoft’s claims that its two-year trial was filled with procedural and legal errors and presided over by a biased judge. The government renewed its arguments that Microsoft acted illegally to squelch competitive threats to its Windows operating system through its dealings with America Online, which is now AOL Time Warner, Sun Microsystems, and a host of leading technology companies. “Microsoft declines to acknowledge the district court’s core findings of fact and instead recites … a sanitized description of its actions based largely on its own proposed — but rejected — findings,” the government said in Friday’s brief. “Our appeal outlined a broad array of legal, procedural and factual errors committed by the district court that we believe will be reversed by the court of appeals,” said Microsoft spokesman Jim Cullinan. But the government said Jackson “properly exercised [his] broad discretion” in conducting the trial. The government’s case is buttressed by a 25-page friend-of-the-court brief filed Friday by AOL Time Warner and three trade groups. The brief is authored by some heavy legal hitters, including former special prosecutor and appellate judge Kenneth Starr, former appellate judge Robert Bork and former Solicitor General Walter Dellinger III. Their brief echoes the government’s argument that Microsoft illegally wielded monopoly power to preserve its Windows operating-system market share. “Microsoft is not the first huge monopolist to claim that its company cannot possibly be divided to promote competition without ruinous results,” said Starr, Bork and Dellinger. “Established principles of competition allow us to predict that the break-up of Microsoft will similarly inject competitive rigor into the industry” to increase innovation. Last April, Jackson issued a judgment declaring that Microsoft committed numerous violations of federal and state antitrust law. In June, Jackson ordered that Microsoft be broken up into two companies, one for its Windows operating systems and one for all of its other products, including the Internet Explorer Web browser and the Office suite of desktop software, for a period of 10 years. Jackson also imposed a long list of restrictions on the company’s business conduct. The government today said that the break up order “preserves Microsoft’s existing business units, but fundamentally alters incentives and restores lost competitive conditions. … The remedy aims to permit competition — rather than Microsoft, the government or the courts — to determine which technologies prevail in the marketplace.” The U.S. Court of Appeals for the District of Columbia Circuit will hear oral arguments on Feb. 26 and 27. Separately, Microsoft Friday scored a legal victory when U.S. District Court Judge J. Frederick Motz ruled that damage claims in 38 of the more than 60 private class action suits against the software giant consolidated in Motz’ Baltimore court were invalid. More than 100 class action suits have been filed against Microsoft since Judge Jackson, in a Nov. 1999 ruling, found that Microsoft wielded monopoly power in the market for operating systems for Intel-compatible personal computers. Microsoft already had succeeded in having several such cases dismissed in state courts. Related Articles from The Industry Standard: Both Sides Name Lawyers in Microsoft Appeal Microsoft Legal Muck Gets Deeper Reading Microsoft’s Tea Leaves Copyright � 2001 The Industry Standard

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