Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Last month, U.S. District Judge Colleen Kollar-Kotelly asked the Department of Justice to do something it really didn’t want to do — take a public position on the case now being litigated against the Microsoft Corp. by nine states and the District of Columbia. With the government’s brief filed last week, it is clear why Assistant Attorney General Charles James and the rest of the Antitrust Division had been so reluctant to get involved. The DOJ didn’t find either side’s approach to the long-running antitrust case to be fully convincing. Instead, the brief signed by James and 11 other Justice lawyers is a highly nuanced document. Justice finds itself in a tough spot. It doesn’t want to undercut its “partnership” with Microsoft now that the two have reached a settlement, but it also doesn’t want to endorse arguments made by the software company that run against decades of department precedent. On a fundamental issue of legal standing, the federal government distanced itself from Microsoft and said the states absolutely have a right to pursue remedies on their own behalf. But, the brief went on to say, the states are wrong to pursue them in this case. Justice, of course, is not in litigation against Microsoft anymore. In November, the two parties reached a settlement in the mammoth antitrust case, with Microsoft agreeing to make portions of its Windows code available to competitors. The company also agreed not to retaliate against companies that select products from other manufacturers to load onto personal computers. The proposed settlement was the subject of a 60-day comment period and remains before Kollar-Kotelly for approval. But half the states that had been on Justice’s team objected to the settlement and went to trial before Kollar-Kotelly, a proceeding that is now in its fifth week. Last week these states, represented by Williams & Connolly’s Brendan Sullivan, rested after presenting testimony from Microsoft competitors and industry experts that the company’s tactics are a threat to competition and innovation. Microsoft attorneys, led by Dan Webb from Chicago’s Winston & Strawn and John Warden from New York’s Sullivan & Cromwell, began presenting their client’s defense, which is expected to take several more weeks. LIMITS ON STATES The questions that brought the Justice Department into the proceedings stem from motions filed in February. That’s when Microsoft formally asked Kollar-Kotelly to dismiss the states’ case on the grounds that court precedents and the Constitution forbid states from pursuing broad claims of antitrust harm. The states “seek to establish themselves as national antitrust policymakers, displacing the Executive Branch of the federal government,” Microsoft argued in court papers. Only the United States “may speak for the public interest,” and the Department of Justice has already settled the case, showing its view of what the public interest requires. Before ruling, the judge asked Justice to file an amicus brief giving its views. Justice weighed in with a filing that rejected Microsoft’s contention that the states have no right to pursue the case — but simultaneously urged Kollar-Kotelly to strike down the states’ case in court. While Justice’s April 15 filing made clear that it continues to stand by the proposed settlement, the department does not want to push the states out of the antitrust enforcement business. Indeed, the DOJ and the states were collaborators from the start on this case and have frequently worked in tandem. “The case law does not compel dismissal of the States’ claims for equitable relief on the grounds Microsoft asserts,” the Justice lawyers wrote. But referring to the states’ position against Microsoft, which includes forcing Microsoft to issue a “modular” version of Windows without other pieces of software, Justice went on to say, “Proposed remedies that chill legitimate innovation and product improvement — even by a monopolist — can deprive the public of significant competitive benefits.” The states’ ideas about how to cure Microsoft’s alleged monopoly power, Justice said, represent an effort “to extend the relief to new products, new services, new markets, and even new theories of liability in the name of deterring future violations as a prophylactic matter.” Rather than urge Kollar-Kotelly to deny the states the right to proceed in court, Justice argued that the judge should proceed to find against the states on the merits. And Justice noted the fact that the only antitrust enforcement agency with national responsibilities chose to settle the case rather than litigate. SPINNING THE BRIEF Microsoft immediately treated the Justice brief as a big win for its side. “We are gratified that the Department of Justice has weighed in to support major elements of our motion to dismiss,” Microsoft spokesman Jim Desler said. “The DOJ acknowledges that our motion to dismiss raises important issues of federal antitrust enforcement policy that are significant in the court’s ultimate decision on this case.” James DeLong, a senior fellow at the D.C.-based Competitive Enterprise Institute, a think tank that advocates free enterprise, went even further. “The end of the brief bluntly tells the judge that she would be wacko not to dismiss the case,” DeLong said. “Even if the nine states were to persuade the trial judge that they deserve more [than Justice got in its settlement], they could not win in a Court of Appeals armed with this DOJ statement.” Jonathan Baker, a former Federal Trade Commission official who is now an antitrust law professor at American University’s Washington College of Law, explains that Justice had two purposes in filing the brief. “Justice had to give the judge a good-faith interpretation of the constitutional and statutory framework, to call it as it saw it. That’s part of the government’s public interest responsibility, and doing so preserves its credibility,” Baker says. “But at the same time, the government took advantage of an opportunity to try to persuade the judge that its settlement was the best resolution for this matter.” Robert Lande, an antitrust professor at the University of Baltimore Law School, goes so far as to say that Microsoft’s argument against the states’ right to participate is so weak that “it lowers Microsoft’s credibility.” “The states clearly have that right,” Lande says. “If they didn’t, Microsoft would have argued this when the case was originally filed. DOJ just wanted to do and say what was correct and right on this point.” On the other hand, Lande adds, Justice is “making the point that as a matter of policy, this should be left to the federal government to handle. The states have the right to file this case, but they should have exercised better judgment, Justice is saying. Justice is going out of its way to slam the states.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.