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Microsoft Appeals Antitrust Ruling to High Court (Post, Aug. 7, 2001)
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Microsoft Appeals to Higher Court
With Steven Newborn

Wednesday, Aug. 8, 2001; 2 p.m. EDT

Microsoft Tuesday appealed the antitrust ruling to the Supreme Court. What does this mean legally?

Attorney Steven Newborn, former director of litigation at the FTC, comes online to talk about the ruling. He is a partner at the D.C.-based Clifford, Chance, Rogers & Wells, Ltd. law firm.

The transcript follows.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

washingtonpost.com: Welcome to washingtonpost.com and submit your questions now on the Microsoft appeal to the Supreme Court.

Fairfax, Va.: When will the Supreme Court act on the appeal?

Steve Newborn: There is no set time for the Supreme Court to act. Indeed, it is very possible that the district court proceedings will begin before the court actually reads the appeal. Unless the Court of Appeals grants a stay pending the appeal to the supreme court this case will be heard by the district court very soon.

Washington, D.C.: Why does it seem unlikely that the Supreme Court will grant Microsoft's request to review the issue of Judge Jackson's disqualification? What factors are against review?

Steve Newborn: this case does not yet appear ripe for supreme court review because there appear to be many questions of fact yet to be determined pursuant to the court of appeals decision. Why should the Supreme Court review at this time when it will have ample opportunity to do so at the next round of appeals after a district court answers the outstanding fact questions.

McLean, Va.: Do you see an evidence of Microsoft using their clout not just in courts but also by pressuring press etc. or is it just another "conspiracy theory."

Steve Newborn: If Microsoft is using their clout they had best hire better clouters. They have been pummeled in the press.

Vienna, Va.: How does the appeal affect current Microsoft projects such as the XP? When will the appeal decision be resolved?

Steve Newborn: The appeal has no effect on XP; however, the DOJ or the states can at any time attempt to enjoin the launch. I do not believe they will.

Laurel, Md.: How is Microsoft's "illegal bundling" of its Internet software with its operating systems any different from McDonald's "bundling" of its burgers and fries in value meals?

Steve Newborn: The court of appeals found that MS illegally maintained its monopoly position by bundling the browser with its operating system. If McDonald's had a monopoly in hamburgers and forced people to purchase fries there is at least an argument that it engaged in similar behavior. In reality, even that would probably not be enough as there has to a showing that the bundling of fries and burgers allowed McDonald's to more easily maintain its burger monopoly.

Bethesda, Md.: The justice department can easily argue that the demonstrations during the trial by Microsoft show that there were not biases by the judge.

Steve Newborn: It is really hard for me to fathom how people can criticize Judge Jackson on the basis of bias. He was a Reagan appointee who has a lot of sympathy for business and only reached his decision after hearing in court about Microsoft's activities as well as observing its conduct in his courtroom. In any event, even the court of appeals, found that there was no bias until the remedy phase.

Cedar Hill, Texas: Can the Supreme Court take the case, find Microsoft guilty, and set a punishment from which there would be no appeal?

Steve Newborn: No, the only question before them is to set aside the entire lower court decision because of the alleged bias of Judge Jackson.

Arlington, Va.: I don't understand what the ruling would do to Microsoft. Does this mean that they will have to break up into smaller companies with different names (but essentially under Microsoft) and confuse consumers? As a consumer you might think that you have diversity but the reality is that you are buying Microsoft products.

Steve Newborn: Judge Jackson's decision of break-up has been set aside. At this point the new district court judge will no doubt hold a remedy hearing after the trial itself and fashion a new remedy, which may or may not include breakup. In any event if break up were ordered there would only be one Microsoft and other companies would have no Microsoft ties except for technology and products. That is Mr. Gates would not own the other "baby bills".

Somewhere, USA: What happens if Microsoft is NOT granted an appeal?

Steve Newborn: A new district court judge will hold a hearing on several matters. These include an appropriate remedy for the monopolization count MS has already been found guilty of and additional hearing on the tying claims. This may also include any bundling involving XP. A district court judge will apparently be named as early as Friday.

Washington, D.C.: Will the Supreme Court take this case now? The issue itself (judge disqualification) doesn't seem
important enough to interest the Court, but will the court be interested only because of the high profile nature of the case? It would seem that the Supreme Court will eventually be asked to review the merits of this case, so wouldn't it be unusual for the court to review the case (albeit different issues in the case) twice?

Steve Newborn: I agree with you. I do not think the high profile of the case will have much to do with this particular decision.

Falls Church, Va.: Who are the key lawyers for Microsoft? Do you think Bill Gates will have a chance to overturn the antitrust ruling?

Steve Newborn: There is always a chance; however, one of the most conservative courts of appeal had found them guilty of violating the antitrust laws and they therefore have a lesser chance than they probably believed before the court of appeals decision came down.

Arlington, Va.: Does this mean that products will change for the consumer? Is this case detracting from the quality of the products?

Steve Newborn: If you mean does their ongoing litigation detract from their business operations the answer I believe is yes. How much, appears to be different for each company.

Arlington, Va.: Isn't the appeal just a waste of Microsoft's -- and the government's (read: taxpayers') -- money?

Steve Newborn: In my opinion, yes. I think their chances of the Supreme Court reviewing at this time are very small. I read where someone believes this is a way of gaining leverage at settlement hearings with the government but I do not think that anyone takes this seriously.

Richmond, Va.: Two questions.

Are people worried that MS will "get off easy" now that a Republican is in the White House?

It seems like they would be interested in talking about a settlement at this point. In a typical case, would you expect a company in MS's position to seek to settle?

Steve Newborn: I am not sure which people may be worried but I do believe that the Department of Justice has made it clear it will prosecute this case. I have always believed MS should settle but they have not. The real problem is what the settlement would be. Most antitrust observers, republicans and democrats alike believe that structural rather than behavioral remedies are both more successful and, although, it may appear strange, less regulatory in nature. That is because a behavioral remedy i.e. cap on pricing, requires ongoing involvement and monitoring of business --something neither the FTC nor the DOJ likes to do.

Newton, Mass.: I'm surprised that in the appeal process all the talk is of Judge Jackson's misconduct, but not Microsoft's. They seem to be getting away with lying in court and falsifying evidence.

Steve Newborn: Let me say that I have the utmost respect for Judge Jackson before whom I tried two antitrust cases. I found him completely open on every issue. His alleged bias (by which I guess is meant his disdain for MS) was only reached after presiding over a long trial. Certainly he is permitted to reach a decision as to credibility of MS officials after listening to them. That being said, it was unfortunate that he decided to go public with his feelings.

Steve Newborn: Thanks for your great questions. The next event in this ongoing saga will be the identity of the new district court judge whose identity we may learn as early as Friday.

© Copyright 2001 The Washington Post Company


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