MS-DOJ: Judge Jackson's findings get a mixed review

During an all-day hearing Monday before the U.S. Court of Appeals for the District of Columbia, three judges broadly hinted at their views on Jackson's famed findings of fact. The findings, a 200-plus-page document issued last year, ultimately led to Jackson's ruling that the company violated several aspects of antitrust law and needed to be broken up.

Appeals court Chief Judge Harry Edwards said he saw no reason to "defer to the findings of fact." He described them as "merely conclusionary," adding, "I find no support for them."

Judge David Sentell, a Reagan appointee, took a different approach regarding the findings of fact. He chastised Microsoft (msft) for its main brief to the appeals court that basically reargued some of the facts.

"It seems like it was written for the jury," he said.

The pointed comment expressed Sentell's belief that the findings of fact is sacrosanct and that the facts should not be argued over again, said Bill Kovacic, an antitrust professor at George Washington University's School of Law.

"In essence, he was saying, 'You should have done a better job convincing Jackson on these points,'" Kovacic explained.

Judge David Tatel also piped in, noting that "the findings of fact are binding on us."

Such comments set the stage for a potentially explosive second day of arguments, which will focus on, in part, Jackson's handling of the case and post-trial comments.

Edwards, in particular, riveted the courtroom. The chief judge asserted that just because Jackson said something doesn't make it true without support in the court record.

"It has to be fact to be a fact," Edwards said.

"What (Edwards) is at least saying is that certain unspecified findings (in the overall findings of fact) are up for grabs," Kovacic explained. "At least in certain areas, if Microsoft has well-focused arguments, he is going to listen."

Although Microsoft appears to have won some judges to its side, Monday's hearings were not one-sided. Both Microsoft and the government appeared to have won victories for parts of their cases.

MS defends itself
In the morning, Microsoft seemed to have the upper hand in convincing the seven judges that a breakup of the company would be a drastic measure and might actually impair the balance of competitiveness in the software industry.

Microsoft attorney Richard Urowsky consistently scored hits against the government's claim the software maker prevented Netscape from distributing its browser, but he fumbled when addressing copyright issues.

In the afternoon, however, the government appeared to be scoring points with its argument that Windows and Internet Explorer are two separate products. The court seemed to be leaning slightly toward adopting a legal standard that would favor the government on this issue, said Bob Lande, an antitrust professor with the University of Baltimore Law School.

The court can use two separate legal standards to determine whether tying Internet Explorer to Windows is a violation of antitrust law, said Lande. Under an earlier ruling issued by the same appeals court in a different Microsoft case, bundling would be permitted if a theoretical customer benefit existed.

In another case, Jefferson Parish v. Hyde, though, the U.S. Supreme Court ruled that tying could only exist if customers demanded the bundle. As a result, under Jefferson Parish, the government can claim that customer demand for an integrated operating system doesn't exist universally because people are still downloading Netscape.

"If they go with Jefferson Parish, they are more likely to find that Windows and IE are two separate products," Lande said. On Monday, he added, the court was "talking in the Jefferson Parish world."

But the judges also struggled with some of the government's most basic assertions, one being that consumers must have a right to remove the browser from the operating system. This didn't sit well with Edwards.

"It is a highly questionable proposition that there is support in the market for browserless operating systems," he said.

But government attorney John Roberts retorted: It's "the difference between bundling, combining and forcing."

Microsoft, of course, hotly contests that the two products are separate. "There are major benefits to Microsoft's integrated design," Urowsky said.

"It makes absolutely no sense" that customers would not want IE integrated into Windows, said Judge Stephen Williams, who added that government lawyers were taking antitrust doctrines on product tying "into new and interesting territory...You're a pioneer. Take credit for it."

Edwards also indicated he favors some of Microsoft's arguments.

Kovacic said it is too difficult from the questioning to say which way the judges might rule on the tying claim, but some judges seem to favor Microsoft. Williams, Douglas Ginsburg and Raymond Randolph appeared to support Microsoft, he said. Judith Rogers and Tatel appear to "slam dunks for the government," he added.