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MSFT appeal challenged
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January 12, 2001: 2:20 p.m. ET
Justice, states ask federal appeals court to uphold order splitting Microsoft
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NEW YORK (CNNfn) - The Justice Department and a group of states suing Microsoft asked a federal appeals court Friday to uphold a lower court ruling that found Microsoft Corp. had violated federal antitrust laws and ordered the software maker to be split in two.
Almost all of the arguments government attorneys made in their 150-page filing with the U.S. Court of Appeals for the District of Columbia repeated ones that had been made in previous parts of the proceedings against Microsoft (MSFT: Research, Estimates). For the first time, however, government attorneys defended the conduct of Judge Thomas Penfield Jackson, who oversaw the trial and ordered that the company be split in two to prevent future antitrust law violations.
The government's star outside counsel, David Boies, is not participating in the appeal of the case. In addition, the Justice Department's antitrust enforcement chief, Joel Klein, resigned at the end of September. Many trial observers believe the Bush administration will not pursue the antitrust case against Microsoft as aggressively as the Clinton administration did.
In Friday's filing, the Justice Department said Microsoft violated a federal antitrust law by engaging in anticompetitive conduct that maintained its monopoly over the operating system market for IBM-compatible personal computers.
The government also said Microsoft attempted to crush rival Netscape and monopolize the Web browser market. Microsoft sought to reach an agreement with Netscape in June 1995 that would have eliminated competition between them in the browser market, the Justice Department said.
Microsoft violated a separate section of federal antitrust law by tying its Internet Explorer browser to its Windows operating system, the government's filing said. The software maker tied the two products together by not making a version of its Windows operating system that didn't contain the Web browser, the lower court had found.
"The antitrust wrong was not that Microsoft added capabilities to Windows, but rather that its actions forced Microsoft's customers and consumers to take Internet Explorer as a condition of obtaining Windows," the Justice Department filing said.
Government lawyers defend Judge Jackson
Microsoft had argued that Judge Jackson didn't give the company enough opportunity to present evidence and witnesses in its defense. Microsoft also had argued that Jackson should be removed from further proceedings involving the company because he showed bias in interviews he granted to newspapers after the conclusion of the trial.
The Justice Department responded in its filing that Jackson managed the case docket properly and didn't rely on inadmissible hearsay in making any findings of fact in the case. Hearsay is evidence given by a witness consisting of a report of something that someone else has said, rather than what the witness has actually seen or experienced.
The government's lawyers also said that Jackson didn't show bias, or the appearance of bias, in comments about the case he made to newspapers and in public lectures.
Now that the Justice Department and the states have filed their appeals brief, Microsoft gets to file a reply brief no later than Jan. 29, which may be up to 75 pages. There will be two days of oral arguments in front of seven appeals court judges on Feb. 26-27.
Microsoft rivals hire Starr
Separately, an industry group representing rivals of Microsoft said Friday it has hired former Whitewater prosecutor Kenneth Starr to help support the government as the antitrust case against the Microsoft moves through the appeals process. Starr, whose credentials include a stint on the U.S. Court of Appeals that is hearing the case, has been engaged by Procomp, an organization that includes AOL Time Warner (AOL: Research, Estimates), Sun Microsystems (SUNW: Research, Estimates) and Oracle Corp. (ORCL: Research, Estimates).
AOL Time Warner is the corporate parent of CNNfn and CNNfn.com
Microsoft stock fell $2.06 to $52.94 in Friday afternoon trading.
-- Reuters contributed to this article 
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