Microsoft's Win Called Nail in Antitrust Coffin

By Matthew Hicks  |  Posted 2004-06-30 Email Print this article Print
 
 
 
 
 
 
 

WEBINAR: Event Date: Tues, December 5, 2017 at 1:00 p.m. ET/10:00 a.m. PT

How Real-World Numbers Make the Case for SSDs in the Data Center REGISTER >

A Microsoft attorney says the striking down of Massachusetts' appeal in the antitrust case removes "the last area of legal doubt" that kept the company waiting on key financial decisions.

Microsoft's victory in a U.S. Court of Appeals ruling Wednesday largely ends the Department of Justice's 6-year-old antitrust case against the software maker and removes a major financial barrier for the company.

Wednesday's ruling struck down Massachusetts' appeal of a 2001 settlement between Microsoft Corp. and the DOJ. Massachusetts was seeking stronger remedies against the Redmond, Wash., company.

Analysts and attorneys reacting to the ruling said it was an expected decision and one that is unlikely to be reconsidered by the U.S. Supreme Court if the Commonwealth of Massachusetts were to decide to make a final appeal.

"It's a definitive nail in the plaintiff's coffin, and it's doubtful that the Supreme Court would pry it back open," said Hillard Sterling, a principal at Chicago-based law firm Much, Shelist, Freed, Denenberg, Ament & Rubenstein PC.

"Massachusetts would have to show the Supreme Court a compelling reason why it should reach out and grab this case and turn it upside down. There isn't such a reason, aside from the state's distaste."

A spokeswoman for Massachusetts Attorney General Tom Reilly said his office is still reviewing the decision and has not made a decision on whether to appeal to the Supreme Court.

For Microsoft, the latest victory in its U.S. antitrust case gives it more leeway in its financial plans. Wall Street analysts have wanted Microsoft to use its substantial cash reserves to issue a dividend or to buy back stock, an issue the company is expected to address during its July analysts meeting.

Microsoft general counsel Brad Smith said in a news conference that Wednesday's decision will give the company more financial flexibility.

"We were very focused on waiting for this decision from the Court of Appeals, and today's decision does remove the last area of legal doubt that we were considering as a factor before we felt that we could move ahead with decision-making with respect to the company's financial reserves," said Smith, a Microsoft senior vice president.

Next Page: Microsoft's not done with antitrust suits yet.

While the ruling was an expected victory for Microsoft, the company remains embroiled in other antitrust litigation. In early June, it appealed the European Union's antitrust ruling, which imposed a $611 million fine and ordered Microsoft to offer a version of Windows without Windows Media Player.

The U.S. Appeals Court ruling has no legal bearing on the ongoing EU case, Sterling said, though the victory is likely to bolster Microsoft's confidence going into the EU appeal.

"Microsoft will use this as another bullet in its weaponry overseas, but all it is is one piece of ammunition, and Microsoft will need to win or lose the case on its underlying merits," Sterling said.

Microsoft already is drawing parallels between the findings in the U.S. Appeals Court ruling and its EU appeal. Smith said that while overseas courts will have to make their own findings based on different laws, a central question remains the same: whether removing code from Windows helps or hurts consumers and competition.

"As this court today concluded, removing code from Windows would hurt consumers rather than help them and would hurt the software industry rather than help [it]," Smith said. "There's no reason to think that the answer should be any different in any other country. The facts are the same."

In past statements, Mario Monti, the European Union's competition commissioner, has defended the EU's sanctions and expressed confidence that the EU ruling would be upheld on appeal.

The U.S. Court of Appeals also denied requests from two trade groups, the Computer and Communications Industry Association and the Software and Information Industry Association, to overturn the antitrust settlement.

Microsoft is far from being free and clear from antitrust litigation in the United States. Microsoft faces government and court oversight under the settlement through 2007, and any misconduct could be grounds for another case, said Matt Rosoff, an analyst at Directions on Microsoft, in Kirkland, Wash.

Rosoff noted that the Justice Department's antitrust investigation stemmed from alleged violations of an earlier settlement.

"This phase of the antitrust battle in the U.S. is over, but Microsoft must continue to accept government oversight and the threat of sanctions, as well as private antitrust lawsuits, as a permanent condition of doing business," Rosoff said in an e-mail interview. "That's one of the negative effects of having the courts decide you have a monopoly."

Check out eWEEK.com's Windows Center at http://windows.eweek.com for Microsoft and Windows news, views and analysis.

Be sure to add our eWEEK.com developer and Web services news feed to your RSS newsreader or My Yahoo page

 
 
 
 
Matthew Hicks As an online reporter for eWEEK.com, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for eWEEK.com. Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.
 
 
 
 
 
























 
 
 
 
 
 

Submit a Comment

Loading Comments...
























 
 
 
 
 
 
 
 
 
Thanks for your registration, follow us on our social networks to keep up-to-date