Court agrees to hear appeals of Microsoft antitrust settlement

***Zardon*** · Mar 28, 2003, 03:06 PM

WASHINGTON — A federal appeals court has agreed to hear two separate challenges to Microsoft's antitrust settlement with the federal government and nine states, putting in question the final resolution of the 4-year-old legal battle.
The U.S. Court of Appeals in Washington, D.C., agreed yesterday to review a Nov. 1 district court ruling that found the settlement agreement was in the public interest. The Computer and Communications Industry Association and the Software and Information Industry Association, which include Sun Microsystems and Oracle, filed the appeal.

In a separate but related case, the court ruled this month that it would hear an appeal of a second Nov. 1 ruling, also by U.S. District Judge Colleen Kollar-Kotelly, that largely approved the settlement agreement with the Justice Department and nine states. This appeal was brought by Massachusetts and West Virginia. Both cases will be heard separately by the entire appeals court panel on Nov. 4.

Kollar-Kotelly's rulings marked Microsoft's most decisive win in its decadelong antitrust battle. She rejected efforts by nine states to impose tougher sanctions against the company for violating antitrust laws, and instead accepted a settlement that competitors say didn't go far enough to prevent future antitrust abuses. Seven of the states chose not to appeal her decision, but West Virginia and Massachusetts decided to fight on.

The appeals court's decision to take up both appeals raised hopes of Microsoft's rivals, which are concerned the company is leveraging its monopoly control of the personal-computer operating-system market to dominate newer markets, including instant messaging and software for handheld computers. The appeals court has broad authority to change the settlement in any way it sees fit, and could even throw out the settlement altogether.

"The fact that they have agreed that the entire court will hear the appeal is good, mainly because it reflects the obvious seriousness the appeals court attaches to the issue," said Michael Morris, senior vice president and special counsel at Sun Microsystems.

Microsoft spokesman Jim Desler said he wasn't surprised the court would hear the states' appeal, but that he didn't expect either the states or trade associations to prevail in their efforts. "The district court thoroughly reviewed this matter in the remedies case in an exhaustive three-month trial," he said.

Antitrust experts remained doubtful that the lower court's rulings would be overturned.

"The fact of the matter is there's a lot of discretion with the district court judge in fashioning that remedy," said Mark Ostrau, an antitrust attorney in the Palo Alto, Calif., office of Fenwick & West. "Unless the appeals court finds some real factual errors, it's going to be a real uphill battle" for Microsoft's opponents.

Under the settlement agreement, Microsoft is required to provide competitors with detailed technical information to ensure competing products work seamlessly with its Windows operating system, which runs more than 90 percent of the world's personal computers.

The agreement requires that Microsoft make Windows available under a standard licensing agreement to computer manufacturers. And it also allows computer manufacturers to remove desktop icons linking users with add-on Windows features, like the Media Player.

Microsoft is also facing an antitrust challenge in the European Union. A decision is expected by summer.

Mar 28, 2003, 03:06 PM	#1
*Zardon* enchanted Join Date: May 2002 Location: Driverheaven Posts: 32,260 Rep Power: 3150	Court agrees to hear appeals of Microsoft antitrust settlement WASHINGTON — A federal appeals court has agreed to hear two separate challenges to Microsoft's antitrust settlement with the federal government and nine states, putting in question the final resolution of the 4-year-old legal battle. The U.S. Court of Appeals in Washington, D.C., agreed yesterday to review a Nov. 1 district court ruling that found the settlement agreement was in the public interest. The Computer and Communications Industry Association and the Software and Information Industry Association, which include Sun Microsystems and Oracle, filed the appeal. In a separate but related case, the court ruled this month that it would hear an appeal of a second Nov. 1 ruling, also by U.S. District Judge Colleen Kollar-Kotelly, that largely approved the settlement agreement with the Justice Department and nine states. This appeal was brought by Massachusetts and West Virginia. Both cases will be heard separately by the entire appeals court panel on Nov. 4. Kollar-Kotelly's rulings marked Microsoft's most decisive win in its decadelong antitrust battle. She rejected efforts by nine states to impose tougher sanctions against the company for violating antitrust laws, and instead accepted a settlement that competitors say didn't go far enough to prevent future antitrust abuses. Seven of the states chose not to appeal her decision, but West Virginia and Massachusetts decided to fight on. The appeals court's decision to take up both appeals raised hopes of Microsoft's rivals, which are concerned the company is leveraging its monopoly control of the personal-computer operating-system market to dominate newer markets, including instant messaging and software for handheld computers. The appeals court has broad authority to change the settlement in any way it sees fit, and could even throw out the settlement altogether. "The fact that they have agreed that the entire court will hear the appeal is good, mainly because it reflects the obvious seriousness the appeals court attaches to the issue," said Michael Morris, senior vice president and special counsel at Sun Microsystems. Microsoft spokesman Jim Desler said he wasn't surprised the court would hear the states' appeal, but that he didn't expect either the states or trade associations to prevail in their efforts. "The district court thoroughly reviewed this matter in the remedies case in an exhaustive three-month trial," he said. Antitrust experts remained doubtful that the lower court's rulings would be overturned. "The fact of the matter is there's a lot of discretion with the district court judge in fashioning that remedy," said Mark Ostrau, an antitrust attorney in the Palo Alto, Calif., office of Fenwick & West. "Unless the appeals court finds some real factual errors, it's going to be a real uphill battle" for Microsoft's opponents. Under the settlement agreement, Microsoft is required to provide competitors with detailed technical information to ensure competing products work seamlessly with its Windows operating system, which runs more than 90 percent of the world's personal computers. The agreement requires that Microsoft make Windows available under a standard licensing agreement to computer manufacturers. And it also allows computer manufacturers to remove desktop icons linking users with add-on Windows features, like the Media Player. Microsoft is also facing an antitrust challenge in the European Union. A decision is expected by summer.