Tech Industry

Antitrust case back to basics

With the contempt accusations put to rest, Microsoft and the DOJ are likely to tone down the rhetoric as they delve into the core issues of the case.

Having put to rest the contentious accusations that Microsoft willfully flouted a court order, the company and the Justice Department are likely to tone down their rhetoric as they delve into the core issues of the high-profile antitrust dispute, legal analysts say.

When the government filed its charges last October, See special coverage: Beyond contempt archaic questions pervaded the case: Did Internet Explorer constitute an "other product" under antitrust law? What exactly did it mean to integrate a product? Such issues--which temporarily took a back seat after the Justice Department asked U.S. District Judge Thomas Penfield Jackson to fine Microsoft $1 million for each day it allegedly violated a court order--will now return to the fore.

"This [contempt issue] was kind of a sideshow," said Joe Sims, a former antitrust attorney for the Justice Department who practices with Jones, Day, Reavis, & Pogue. "Today's development really doesn't change what's likely to happen in this litigation very much."

Sims said the case will proceed on two tracks. One will involve ongoing proceedings before Harvard Law School professor Lawrence Lessig, the computer and Internet law expert assigned as a "special master" to collect evidence and recommend a legal outcome in the case. For the time being, those proceedings are confidential and unlikely to generate the kind of headlines that have been almost a daily occurrence in the court battle over the last three months.

The other track will take place before the Court of Appeals for the District of Columbia, which has agreed to hear an expedited challenge to Jackson's preliminary injunction. Microsoft has also asked the court to stay the proceedings before Lessig on a number of grounds, including evidence that makes Lessig appear biased against the software giant.

Sims added that most of the activity in the coming months will focus on appellate court proceedings, in which Microsoft will argue that Jackson overstepped his bounds. In mid-December, the judge ruled that Microsoft did not violate the 1995 consent decree because the company's interpretation of the settlement was reasonable.

"When the court declined to hold them in contempt, it's at least arguable that that was the end of the court's jurisdiction," Sims said. "If Microsoft prevails in that argument, this whole proceeding is over."

While the issues before the appeals court are crucial for both sides, other legal observers agree that they aren't likely to lend themselves to the rhetoric that has driven the case so far. "The Justice Department is saying it won. Microsoft is saying it won. I think both are going to quiet down," said Rich Gray, an antitrust attorney at Bergeson, Eliopoulos, Grady, & Gray. A hearing of the preliminary injunction is scheduled for April 21.

Gray added that the settlement may have been a clever way out of a bad situation for Microsoft, which seemed to have alienated Jackson at several points in a two-day contempt hearing last week. "I think Microsoft dodged a bullet," he said.

By the time the next phase of the case gets decided, the issue may be moot by the release of Microsoft's successor to Windows 95, which is expected to integrate Internet features more tightly, Gray noted. "Nothing else may matter because [by then] Windows 98 will be on the marketplace."

Samuel Miller, an antitrust attorney who headed the Justice Department's original case against Microsoft, agreed that Windows 98 will become a central focus in the case. "I think the Justice Department's goal is to establish rules that will affect not just the distribution of Windows 95 but will have implications for the distribution of Windows 98 as well."

That will be no small undertaking for the government. While the Justice Department says it is continuing its investigation of the software giant's future operating system, slated for delivery by June, antitrust attorneys say the department will have an uphill battle applying "anti-tying" provisions in the consent decree to Windows 98.

"If the language in the consent decree that permits Microsoft to integrate new functions into its operating systems means anything at all," Gray said, "it has to mean that Microsoft has the right to do what it has announced it is doing in Windows 98."