Microsoft files rebuttal

By Nancy Weil and Margret Johnston
IDG News Service, 02/02/00

Microsoft has filed its rebuttal of the U.S. government's most recent court filing in the ongoing antitrust trial. The rebuttal is the last stage in the case before the two sides present their final oral arguments in front of U.S. District Court Judge Thomas Penfield Jackson.

Microsoft is accused by the Department of Justice and 19 U.S. states of illegally using its dominance in PC desktop operating systems to try to quash competition in other areas, such as the market for Web browsers.

In effect, the Microsoft document is a rebuttal of the government's rebuttal of the software company's legal defense.

Once again, as the firm has done in previous filings in the case, Microsoft defended itself using firm and certain terms.

"By lambasting Microsoft, plaintiffs apparently hope to draw attention away from the flaws in their case," the Microsoft rebuttal said. "Time and again, plaintiffs' only support for bold pronouncements about applicable legal principles is a citation to their own proposed conclusions of law - which themselves contain little in the way of legal authority."

The government has argued that Microsoft violated antitrust laws and that the company in its conclusions of law filing a week ago ignored the substantive issues of the case, instead addressing "strawmen," and taking "a series of potshots," while also misstating legal standards to evade the relevant points in the dispute.

The Microsoft rebuttal attempts to deconstruct the government's earlier filing with numerous examples of case law and other pointed criticisms of the way the Justice Department has backed up its case. The software maker says the Justice Department failed to provide specifics for its "strawmen" assertion and sought to apply out-of-context passages from decisions involving different market circumstances.

After Jackson ruled last November in his findings of fact that Microsoft is a monopoly, each side was allowed to respond with conclusions of law, which set forth how the software maker and the U.S. government believe that antitrust law should be applied to the judge's findings of fact. Each side also was granted the opportunity to file rebuttal briefs arguing points made in the other's conclusions of law.

Microsoft consistently has defended its actions, contending that it is not a monopoly and that it has not misused its market position.

The software vendor's brief says the government is tying claim involving the integration of Microsoft's Internet Explorer Web browser and Windows operating system fails because the Windows 98 operating system is a single, integrated product. Microsoft claims it is not forcing any customers to purchase a second distinct product, and the alleged tie does not foreclose a substantial amount of sales of the allegedly tied product.

The company further argued in the brief that Microsoft's license agreements with PC manufacturers do not constitute an unlawful restraint of trade, and it says the Justice Department's attempted monopoly claim flies directly in the face of settled cases.

Microsoft has said all along that it has not engaged in illegal anticompetitive behavior by, for example, forcing other vendors to sign exclusionary deals that cut rival companies, particularly Netscape (now part of AOL), out of the Internet software market.

In advance of this week's expected brief from Microsoft, the nonprofit Association for Competitive Technology (ACT) filed a friend of the court, or amicus curiae, brief supporting the software maker. Microsoft is a member of that group, which says it represents 9,000 IT vendors.

Microsoft designated ACT as a friend of the court when Jackson asked the sides in the case to choose "friends" to file briefs in the case. Such documents are intended to point out issues that might otherwise not be considered by the court, and are submitted by individuals or groups that are not a party to the lawsuit in question.

ACT agreed in its 45-page brief with Jackson that Microsoft is a monopoly, but said that the company's behavior did not violate antitrust laws. Under U.S. antitrust law, it is not illegal for a company to be a monopoly. It is, however, illegal to use monopoly power to gain advantage in other markets or in ways that are anticompetitive.

Other amicus curiae briefs have also appeared, including documents that support the U.S. government's position and a brief supporting Jackson, who designated Harvard law Professor Lawrence Lessig as his friend of the court. Microsoft argued against that choice, contending that Lessig has "strong views" about the software maker.

Lessig, a recognized authority on the topic of cyberspace law, was first appointed by Jackson as a "special master" in a related Microsoft antitrust case, but was removed from that duty when an appeals court ruled that the position wasn't necessary in the matter.

This week's briefs are the last scheduled filings before oral arguments from both sides regarding how existing antitrust laws should be applied to Jackson's findings of fact. Jackson will hear oral arguments Feb. 22.

Microsoft can be reached at 425-882-8080 or at www.microsoft.com/. The Justice Department can be reached at www.usdoj.gov/.