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DOJ, states file rebuttal to Microsoft arguments

The U.S. Justice Department and 19 states brave a blizzard to file another brief in the Microsoft antitrust trial, which is rapidly moving toward oral arguments.

Neither snow nor rain stops the postal service, and the same could be said for the team of lawyers prosecuting Microsoft.

The U.S. Justice Department and 19 states braved a blizzard to file another brief in the Microsoft antitrust trial, which is rapidly moving toward oral arguments.

The government today Microsoft's day in court had been scheduled to file the 30-page rebuttal to Microsoft's proposed "conclusions of law," but officials for the Justice Department and states earlier had said the filing would likely be delayed. Heavy snows closed federal offices in Washington, D.C., including the federal court that is hearing the Microsoft case.

Nonetheless, the government filed a response and it was appropriate for the weather--blustery--said legal experts.

"There is nothing surprising here, and as expected the government attacked core arguments" put forth by Microsoft, said University of Baltimore School of Law professor Bob Lande.

As predicted, the government highlighted the findings of fact issued on Nov. 5 by U.S. District Judge Thomas Penfield Jackson and disparaged Microsoft's arguments. In his findings, Jackson concluded Microsoft is a dangerous monopoly that used aggressive and illegal means to preserve its Windows franchise.

"Microsoft treats as nearly an afterthought both the Court's core finding that Microsoft has monopoly power and the unifying theme of the Court's numerous findings on Microsoft's conduct," the rebuttal states.

"Microsoft fought a multifront campaign, using a broad array of anti-competitive tactics that reduced rather than enhanced consumer choice, to sustain the critical barrier to entry protecting its monopoly power," the rebuttal continued.

The government referred again and again to Jackson's findings, which "establish a violation of Section 2 (of the Sherman Act) under black-letter principles of monopolization law."

The government faulted Microsoft's allegation that the definition of its monopoly market, PC operating systems, is too narrow and that competitors lurk at every turn.

This approach was not unexpected, said Glenn Manishin, an antitrust attorney with Patton Boggs in McLean, Va. The government focused "on some of what I call the silliness of Microsoft's argument, particularly their definition of the market to include every device known to man, plus even those that haven't been invented yet."

The government spent about half its brief dealing with the issue of monopoly power, which is the strongest portion of its case, said Dana Hayter, an antitrust and intellectual property attorney with Fenwick & West in San Francisco.

The government also addressed the issue of tying the browser to the operating system, one of the stronger areas of Microsoft's proposed conclusions of law, said legal experts.

In a compelling turnabout, the government used an appeals court ruling in an earlier case to support the idea that Internet Explorer and Windows 95/98 are separate products merely "bolted" together for commercial power. Microsoft earlier used that same ruling to show the two products are actually one.

Microsoft reacted strongly to the government's approach. "Now, at the eleventh hour, the government has concocted and created something called the 'bolting' principal of the decision," said Microsoft spokesman Jim Cullinan. "Windows 98 is much less bolted than Windows 95. And the appeals court already ruled in favor of Microsoft for Windows 95."

Another argument, that Microsoft's anti-competitive behavior increases its rivals costs, also drew Microsoft's ire.

"One example of the government trying to create new law is where the government says it is anti-competitive for one company to take actions that raise one rival's costs," Cullinan said. "This is nothing more than a radical, fringe theory, not the law."

The government also addressed exclusive contracts used by Microsoft to prevent computer makers and Internet service providers from distributing Netscape Communicator.

The brief also dealt extensively with the allegation Microsoft extended its monopoly to the browser market, another area legal experts claim is a weak area for the government.

"Contrary to Microsoft's contention, the findings also establish a dangerous probability that Microsoft would achieve power over price (or innovation, which can effectively decrease price by increasing the value of a product even while its dollar price remains at zero)," the brief states.

The government also attacked Microsoft?s contention that U.S. copyright law protects its right to impose boot-up screen restrictions on PC makers.

Microsoft will file a response to the brief on Feb. 1 while oral arguments are scheduled to begin on Feb. 22.