Microsoft-Caldera antitrust judge skeptical

The judge hearing Caldera's antitrust lawsuit against Microsoft expresses strong doubts about key allegations in the case.

3 min read
SALT LAKE CITY--The judge hearing Caldera's antitrust lawsuit against Microsoft today expressed strong doubts about key allegations in the case, but held out the possibility that when combined with other claims, there may be enough evidence to prove the software giant illegally froze a competing operating system out of the market.

At a hearing in federal court here, Microsoft took aim at two parts of a case accusing it of using its dominance to crush DR-DOS, which Caldera obtained three years ago. U.S. District Judge Dee Benson appeared receptive to Microsoft arguments that the Linux software provider had failed to support allegations that the software giant used fraudulent product preannouncements to hurt the operating system.

"Your facts strike me today as a lot thinner than when I read" earlier briefs in the case, Benson told Caldera attorney Stephen Susman. "It would seem to me that the [lack of facts] may weaken your case."

Benson said Caldera may have "misrepresented" facts when it pointed to an April 1993 email Microsoft in which manager David Cole suggested the company "keep mum about the potential" scheduling setback that would keep what is now known as Windows 95 from being released by December. Caldera claims that the episode was just one of many examples of the company making public promises it knew it could not deliver.

But Microsoft attorney James Jardine told the court Caldera had not provided any evidence the software giant publicly promised to deliver software by December of 1993, and when Benson asked Caldera attorneys to provide such evidence, Sussman said he'd research the matter and submit his findings in a court brief.

Today's hearing is one of five scheduled over the next few weeks in the private antitrust lawsuit, which Caldera filed in 1996 on the same day it obtained the rights to DR-DOS from Novell. The hearings are being held so that both sides can argue whether nine separate Microsoft motions seeking to whittle down the case should be granted.

Product preannouncements, frequently called as "vaporware" announcements because they often promise much more than they deliver, are a key allegation of Caldera's case. Caldera alleges that Microsoft's fraudulent promises to deliver a product that offered the same features found in DR-DOS dissuaded customers from buying the rival system. Today's hearing also touched on Microsoft's alleged campaign to create "fear, uncertainty and doubt" about DR-DOS by publicly disparaging the product and making false claims about its performance.

While Benson voiced skepticism about Caldera's vaporware accusations, he told both sides he was not yet ready to throw out the claim altogether.

"I'm inclined to find that when packaged with other alleged predatory and anticompetitive conduct, this kind of product preannouncement forms a basis for finding" an antitrust violation, said Benson. He held out the possibility that Caldera could still use the allegations in an attempt to show a pattern of illegal behavior.

"Any evidence they can convince me is probative of anticompetitive behavior of Microsoft I will be inclined to let in," said Benson, who peppered attorneys on both sides with pointed questions.

The comments appeared to have relevance for a motion Caldera filed seeking to throw out all of Microsoft's recent motions to dismiss. Caldera argues that the motions improperly slice up its case and that the company should be able to present the case in its entirety to a jury. Benson said Caldera's arguments in its motion to strike formed the "lynchpin of the way the court may be deciding the case" and moved up arguments on the matter for early June.

Benson also appeared skeptical of Microsoft when it argued the showing Caldera must make to prevail on claims that Microsoft's preannouncements violated antitrust laws. Microsoft rejected Caldera arguments that a showing that the statements were "objectively unreasonable" sufficed, saying instead the smaller company had to show that they were "knowingly false."

Benson had trouble accepting that Microsoft could make recklessly optimistic predictions about the release of its products and other unreasonable statements without running afoul of antitrust laws.

"So we allow a monopolist to commit fraud and unless it's a certain type of fraud it doesn't violate" the law? Benson asked. "Doesn't that seem to be an odd result in antitrust law?"