U.S. vs. Microsoft
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  Government, Microsoft Present Contrary Views of Trial

By John Schwartz
Washington Post Staff Writer
Wednesday, August 11, 1999; Page E3

Microsoft Corp. and the U.S. Department of Justice squared off in their antitrust battle once again yesterday, with wrap-up filings that seemed to describe two very different cases. Microsoft's take: The government proved no wrongdoing in the eight-month trial. The government's: Microsoft clearly engaged in a "broad pattern of unlawful conduct."

In the filings, each side proposed "findings of fact" that it hopes U.S. District Judge Thomas Penfield Jackson will accept in his deliberations. After another round of filings and oral arguments, Jackson will issue his own findings of fact from which the legal issues will subsequently be argued.

Finding a middle ground between the two versions of events may prove daunting, George Washington University law professor William Kovacic said after plowing through nearly 1,200 acrimonious pages.

"It really is 'Rashomon,' " he said, citing the 1950 film masterpiece by director Akira Kurosawa in which four conflicting stories are told of the same crime. "These are extraordinarily different assessments of what took place."

In the world according to Microsoft, the government has failed to prove any of the points necessary to make a judgment stick under the Sherman Antitrust Act.

"While the government may have scored public relations points against the company in the initial phase of the trial using courtroom theatrics and bits of evidence out of context," the document states, government lawyers have not proved key allegations of their case: that Microsoft "tied" its Internet browser software to its Windows operating system, that Microsoft prevented Netscape Communications Corp. from getting its own browser to customers, and that consumers have been harmed by Microsoft's business strategy.

The government's antitrust attack is "nothing less than an attack on innovation," the company concluded. "This case is largely a vehicle for Microsoft's competitors to attack Microsoft, rather than compete in the marketplace."

The federal government, on the other hand, sees "a broad pattern of unlawful conduct" on Microsoft's part, "with the purpose and effect of thwarting emerging threats to its powerful and well-entrenched operating system." The company's "predatory campaign" included attempts to, as a statement attributed to Microsoft put it, "cut off Netscape's air supply" and keep other competitors from gaining ground in the software marketplace. These were said to included Sun Microsystems Inc.'s Java programming technology, Intel Corp.'s Native Signal Processing and Apple Computer Inc.'s QuickTime multimedia software.

Consumers, the government argued, have indeed been harmed and will continue to be, because Microsoft has impeded the progress of competing products to the market and has "deprived consumers of the potential benefit of greater choice, more innovation, and lower prices for Windows, and greater innovation in markets related to Windows, that might have resulted from uninhibited operating system competition."

A Microsoft official contended that the government's document makes the case that the company is a tough competitor, but that it did not demonstrate that it violated the nation's antitrust laws.

"At the end of the review of the admissible evidence, we believe that the judge will be able to find that consumers were not only not harmed by any of Microsoft's conduct, but they were in fact the beneficiaries of a wave of innovation and competition," said Microsoft General Counsel William Neukom.

Justice Department officials declined to elaborate on their 774-page document.

On Sept. 10, each side will turn in amended filings that take into account the arguments presented by the other. Attorneys for Microsoft and the Justice Department will then argue for their version of events before Jackson on Sept. 21.

One observer of the case, antitrust lawyer Steven Newborn of the Washington law firm Rogers and Wells, said that the massive filings may be redundant, as Jackson has heard all of the testimony firsthand.

"The 1,200 pages are going to be nothing more than reinforcing a decision he's almost certainly already come to," Newborn said.

But Washington lawyer George S. Cary sees it as more subtle than that. The system that Jackson has established to determine the facts provides "another example of how the judge has taken control of the process here," he said. Jackson, he said, "has done a very capable job of making the process work in a very complicated antitrust case."

© 1999 The Washington Post Company

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