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Aug. 7, 2000
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Microsoft Breakup Is Less Certain Than You Think
Judicial bias threatens to upend the landmark legal decision
By Stuart J. Johnston
It's more than just that the same appeals court overturned three out of four of Jackson's earlier rulings against Microsoft. The case really took shape after Jackson's most important earlier ruling was rejected in June 1998. The appeals court found that Microsoft's bundling of Internet Explorer with Windows 95 didn't violate the original 1994 consent decree. The court went further--without prompting--and ruled that it wasn't illegal tying under antitrust law as long as Microsoft could show "any plausible consumer benefit" whatsoever. Since more than 80% of users wanted the integration, there was no question. It was a warning shot that Jackson deliberately ignored.
That summer, the government piled on further charges--new accusations by America Online, Apple Computer, IBM, Sun Microsystems, and others. However, the government didn't bother to file a new lawsuit and Jackson didn't require it, though he should have. Neither did Jackson give Microsoft the extra time it requested to prepare a defense against the expanded suit.
To hurry the case along, Jackson allowed each side to present just 12 witnesses. He then let plaintiffs' witnesses make statements such as the following: "I wasn't present, but my subordinate told me that the Microsoft exec said..." blah, blah, blah. Even I've seen enough episodes of Law and Order to know what hearsay is--inadmissible.
Don't forget that the same appeals court threw Jackson's predecessor, Judge Stanley Sporkin, off of the consent-decree hearings because he let lawyer Gary Reback present "evidence" from three anonymous Microsoft competitors-- actions the appeals court later found to be a clear violation of Microsoft's Sixth Amendment right to confront its accusers. Sporkin was removed from the case for bias, for that incident and because he refused to believe anything Microsoft's representatives said in court.
Jackson did virtually the same thing. In his findings of fact, he refused to concede Microsoft attorneys a single point in any of their arguments. He even ignored statistically provable facts. These included things such as Netscape's market share and the purchase of Netscape by AOL in one of the largest deals of its kind to that time. His conclusion was that Netscape had been destroyed, even though the company had garnered a multibillion-dollar buyout only a couple of years after it was founded. Now Netscape version 6 is about to come out, and every indication is that AOL will promote it as the browser of choice for its 23 million customers. Jackson also completely discounted the growing importance of Linux, which recently became the second-most- popular server operating system, behind only Windows NT.
When the suit reached the penalty phase, Microsoft lawyers asked for the opportunity to present witnesses before the judge's order, but Jackson cut them off in a proceeding that lasted just a single day. By comparison, the largest previous antitrust case began under the Johnson administration and ran until halfway through Ronald Reagan's first term.
By then, it was becoming clear that Jackson holds a personal animosity toward Microsoft. Jackson demonstrated this after he issued his breakup order, when he said in an interview: "Were the Japanese allowed to propose the terms of their surrender? The government won the case." This from a federal judge who will likely have to hear further motions in the case.
So if you've been chortling about the Microsoft breakup, don't hold your breath. I don't know how the Supreme Court will ultimately rule, and that's the wild card. But if the Supremes let the appeals court examine the case first, that legalistic boiling oil will probably end up being more like suntan lotion. Because of Judge Jackson's actions--acceptance of hearsay, lack of due process, outright bias, and ignoring clear warnings from an appeals court that's now likely to look over everything he has done with a big magnifying glass--much of the decision will likely end up on the cutting-room floor. Microsoft's behavior may indeed warrant serious punishment. But thanks to a judge who let his feelings get in the way of good legal judgment, that's not likely to happen.
Stuart J. Johnston has covered Microsoft for more than 12 years. He can be reached at stuartj@halcyon.com.
ometime in October, we'll know if the Supreme Court will directly hear the Microsoft case or pass it down to the full U.S. Court of Appeals, which loudly signaled in June that it wants to review the case first. If that happens, which I think is pretty likely given the complexity of the case, then I suspect much of Judge Thomas Penfield Jackson's ruling will be tossed out.
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