Accusing Microsoft Corp. of ignoring the law and evading the truth, government lawyers fired back at the company yesterday, stating again that common sense and case law support allegations that Microsoft illegally exerted monopoly power to crush competitors.
In a needling, 30-page legal brief filed with Thomas Penfield Jackson, the federal judge overseeing the antitrust trial, officials at the Justice Department and 19 states said the software giant has defended itself by contradicting Jackson's own findings of fact. In particular, government lawyers said that Microsoft took "potshots" at the judge's findings and treated as "nearly an afterthought" Jackson's conclusion that the company enjoys monopoly power.
"Microsoft fought a multi-front campaign, using a broad array of anti-competitive tactics that reduced rather than enhanced consumer choice, to sustain the critical barrier to entry protecting its monopoly power," government lawyers stated.
The filing is the latest in an ongoing and increasingly technical war of words between government lawyers and Microsoft, all of which is designed to help Jackson shape his conclusions in the antitrust case. Oral arguments are scheduled for February and Jackson's conclusions are expected in March, with a remedy phase to unfold in the proceeding months if Jackson determines that Microsoft broke the law.
Meanwhile, government lawyers are still trying to determine what remedy they will urge if they prevail in the case. Building a consensus on that issue could prove tricky.
Yesterday, the attorney general of Ohio, Betty D. Montgomery, said that she was leaning toward a remedy that imposed restrictions on Microsoft's conduct, a solution that falls well short of the breakup that Justice lawyers reportedly have decided to ask Jackson to impose. Jackson has asked that the plaintiffs present a unified front when and if the trial reaches a remedy hearing.
Officials at Microsoft countered that the government's brief ignores the challenges posed by strong and growing competitors such as America Online, which recently agreed to acquire Time Warner. And the brief misreads case law to suit the government's purposes, company officials said.
"I give them credit," said Mark Murray, a spokesman for the Redmond, Wash.-based company. "They were dealt a bad hand on tying and foreclosure, so they're trying to be creative and gin up some new arguments. I don't think it's going to be persuasive, ultimately."
Microsoft now has the chance to respond to the government's brief, which was a reply to a Microsoft brief filed last week, which in turn was a reply to a Justice brief late last year.
Government lawyers dismissed Microsoft's claim that it faces "competitive threats" and is not a monopoly when the market is defined beyond the world of Intel-compatible PCs. Jackson, the plaintiffs noted, has already determined that these "threats"--from companies such as Apple Computer Inc.--aren't very threatening to Microsoft and won't challenge its pricing power in the PC market.
In addition, the government assailed Microsoft's contention that its contracts with computer makers--deals that effectively prevent companies such as Dell Computer Corp. and Compaq Computer Corp. from altering the Windows operating system--are protected by copyright law. Microsoft had cited previous cases, including one involving the British comedy troupe Monty Python's Flying Circus, to buttress its claim that it can restrict how and when others can tinker with its intellectual property.
The government countered that copyright law does not trump antitrust law, quoting a Supreme Court ruling in Broadcast Music Inc. v. CBS that determined that "the copyright laws confer no rights on copyright owners to fix prices among themselves or otherwise violate antitrust law."