June 28, 2001
OK, I admit it. I'm been spending too much time today following today's U.S. appellate court ruling in the Microsoft case, in part because back in a previous career as a journalist I spent a year covering the court system. While I'm sure there are lawyers who can give a better analysis of the ruling, if you're interested, here's my take on it (and yes it's totally off-topic).

An important point that's been overlooked by most of the articles is that U.S. appellate courts deal in matter of law and are loath to delve into the factual aspects of the case, unless it's extremely clear there's evidence that was overlooked by the trial judge.

And in fact the appellate court agreed 7-0 that Microsoft is a legal monopoly and used illegal and anti-competitve means to maintain it. (It can be legal to be a monopoly, for example right now Californian would be happy to see our monopoly power companies back, but using your monopoly to crush potential competitors is a no-no.)

What they set aside was the remedy (breaking up Microsoft) and took the case away from Judge Jackson. The latter wasn't a huge surprise, since it's highly unusual for a judge to make the sort of comments Jackson made. Jackson in essence taped "kick me" sign to his backside, especially since this particular appellate court is has four conservative judges who'd butted head with him previously in the case. (The opinion devotes about 20 of 125 pages to Jackson's conduct.) But however, the appellate judges seemed to dislike, Jackson I suspect they were constrained by the factual record. This illustrates how important the factual record will probably be if the case gets appealled to the U.S. Supreme Court.

That factual record will probably also constrain the actions of whatever trial judge gets handed the case. And there'll be another interesting dynamic at work. Judge Jackson's unusual behavior seems to have come because he simply got fed up with Microsoft's legal tactics and their attorneys. It'll be interesting to see if Microsoft ticks off the new judge as well.

What I'm still not clear on is to what extent the appellate court disagreed that Microsoft used its monopoly to create new monopoly in new areas (i.e. the browser market). It sounds like some of this is being sent be to trial court to clarify this issue. If there's some new evidence to be tried, I'm not sure whether the feds might be able amend their lawsuit to introduce new alleged anti-competive acts. For example, state attorneys general have consider suing over Microsoft "tying" thing like Windows Media Player and instant messaging into the upcoming WindowsXP, as well as its HailStorm initiative and its approach to XML, where it appears to be using versions that are slightly incompatible with standard XML in ways the reportly favor its products.

Another wildcard will be how aggressively the feds decide pursue things now. Part of Microsoft's past legal strategy in fact appeared to be trying to delay things out as long as possible to get closer to last November's election in hopes of a Republican win—and House Majority Leader Dick Armey's comments show why Microsoft pursued that strategy. The state attorneys general could pursue things on there own if the feds decide not to appeal, but that's a tough road.

The final wildcard might be private lawsuits that might be brought, since they can cite the "Microsoft is an illegal and anti-competive monopoly" ruling instead of having to prove it themselves each time. That makes it much easier for people to win these lawsuits—which could prove expensive for Microsoft. That's obviously something Microsoft wants to avoid, but even if the Bush administration decides that's what's good for Microsoft is good for America and it's time to settle the case, it's doubtful the federal lawyers would want to bargin away the finding that Microsoft is an illegal monopoly. Which probably would prevent a settlement.

So it'll be interesting to see how things play out… ::

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