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  Microsoft Wins Appeal To Close Depositions

By Rajiv Chandrasekaran
Washington Post Staff Writer
Thursday, August 20, 1998; Page E01

A federal appeals court ruled yesterday that the public and the press cannot witness the Justice Department's pretrial interviews with Microsoft Corp. Chairman Bill Gates and 16 other company executives.

The ruling overturns a lower-court decision permitting open depositions and would prevent a sensational public confrontation between government lawyers and Gates, the world's wealthiest man. Both sides are preparing for a courtroom showdown next month over allegations that Microsoft's business practices violate federal antitrust laws.

Several news organizations, with the backing of the Justice Department, had asked to attend the interviews. They cited an obscure law passed by Congress in 1913 called the Publicity in Taking of Evidence Act, which requires depositions in cases brought under the Sherman Antitrust Act to "be open to the public as freely as are trials in open court." A federal judge last week said the law appeared straightforward and ruled that depositions be opened to the public.

Microsoft appealed, contending that public depositions would lead to a "media circus" and a "carnival atmosphere." The company also argued that the open proceedings would expose its trade secrets and that the law should not apply to modern antitrust trials.

The three-judge appeals panel did not rule on the validity of the law yesterday, deferring that matter for a hearing sometime in the fall. That timetable virtually ensures that the hearing would take place after the antitrust trial, which is scheduled to begin in September.

The appeals court said that if it finds the law applies to modern cases, the public can view videotapes of the interviews. If, however, the court finds that the act is outmoded, the judges said the damage of open depositions before the trial could not be undone.

"The balance of harms favors [Microsoft]; if [Microsoft] prevails, the disclosure could not be undisclosed, whereas if [the government lawyers and news organizations] prevail, the text and videotape of a private deposition can then be disclosed," Appeals Court Judges Stephen F. Williams, Douglas H. Ginsburg and David B. Sentelle wrote in a two-page order.

But a lawyer for the New York Times, one of five news organizations that requested the open depositions, said the ruling denies the public's right to view the proceedings as they take place, instead of weeks after the trial ends.

"We think they have overlooked the right we have to contemporaneous access to this information," said Adam Liptak, a senior counsel for the New York Times Co.

Liptak said the news organizations had not decided whether to appeal to the Supreme Court.

A Justice Department spokeswoman would not comment on the ruling other than to say that "the court order is clear, and we'll proceed in accordance with it."

A Microsoft spokesman said the company was "pleased with the decision."

U.S. District Judge Thomas Penfield Jackson, who is handling the case and issued the initial open-deposition ruling, plans to meet today with lawyers on both sides to discuss a schedule for the depositions and the trial itself, which was supposed to begin Sept. 8. Government and Microsoft lawyers asked Jackson last week to delay the trial until Sept. 22 because the appeal had put the deposition-taking process on hold.

The Microsoft spokesman, Greg Shaw, said the appeals court ruling "will let all of us move ahead with trial preparation."

The Justice Department and 20 state attorneys general contend that Microsoft is violating antitrust laws by including Internet "browsing" technology in its Windows 98 operating system software. The government wants Microsoft, whose operating software runs most of the world's personal computers, either to remove its browser from Windows 98 or include one made by rival Netscape Communications Corp.

Holding a trial and getting a decision in the case as quickly as possible is important for the government's lawyers because delays weaken the market impact if the government ultimately wins the case. Windows 98 was released in May and has sold more than 1 million copies with the integrated browser.

© Copyright 1998 The Washington Post Company

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