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Microsoft: We didn't break the law

Jackson says it's a predatory monopolist. The DoJ says it tried to illegally maintain that monopoly. Now MS hits back -- says judge's findings of fact are 'unsupported by the record.'

Microsoft stood its ground against government trustbusters Tuesday with its latest legal filing to US District Judge Thomas Penfield Jackson.

Citing copyright laws, a 1998 appeals court ruling and Jackson's findings of fact, Microsoft claimed it is not a monopoly and did not break federal antitrust laws by tying Internet Explorer to Windows or striking exclusionary agreements with its partners.

In a 70-page filing, Microsoft responded to charges by the US Department of Justice and 19 state attorneys general that the company violated both sections of the Sherman Antitrust Act in at least four ways.

Tuesday's filing follows Jackson's November 5 findings of fact, which declared Microsoft a predatory monopolist.

In Microsoft's filing, the company argued that, even based on Jackson's findings, it didn't break the law. "Needless to say, Microsoft respectfully disagrees with many of the Court's findings of fact and believes that they are unsupported by the record," the filing stated.

However, Microsoft attorneys said the company will accept the findings for the sake of argument and for the purposes of preparing its proposed conclusions of law. "Even accepting the court's findings of fact, plaintiffs still have not satisfied their burden under the governing law on any of their claims," the document stated.

The DoJ had a chance to respond to the findings last month, in a filing known as the "proposed conclusions of law" -- or how Jackson's findings should be interpreted through the lens of the law. On Tuesday, it was Microsoft's turn to submit its version of that document. Each side will have another chance to respond. After that, if they don't settle, the judge will issue his final ruling.

In the document, Microsoft directly addressed last month's DOJ filing. Specifically, the company denied:

  • illegally tying IE to Windows,

  • striking exclusive agreements that illegally prevented Netscape Communications from shipping its rival browser,

  • illegally preventing computer makers from altering Windows,

  • trying to monopolise the market for Web browsing software, and

  • illegally attempting to maintain that monopoly.

Microsoft rejected government claims that it illegally tied Internet Explorer to Windows. According to the Microsoft filing, DOJ attorneys failed to show that Internet Explorer is a separate product from Windows, that Microsoft forced anyone to purchase IE as a condition of buying Windows, or that the sale of the integrated IE browser foreclosed Netscape from shipping the browser.

The company cited liberally from a 1998 pro-Microsoft ruling by the District of Columbia Court of Appeals. In that ruling, the court said Microsoft could not be forced to remove IE from the operating system.

Microsoft also refuted DoJ arguments that the company entered into illegal exclusive contracts. Though it didn't deny striking exclusive deals, the company said government attorneys didn't establish that the pacts foreclosed Netscape from distributing its browser.

"In fact, the agreements were procompetitive because they enabled Internet Explorer to compete effectively against Netscape Navigator during a time period in which the Court found that Navigator enjoyed a usage share above 80 percent," Microsoft attorneys wrote.

The attorneys cited copyright law when denying government claims that it illegally prohibited computer makers from modifying the boot screens. "As the holder of valid copyrights, Microsoft is entitled to require its distributors -- including OEMs [original equipment makers] -- to deliver Windows to users as Microsoft designed it. That is the essence of copyright," the company argued.

The company also denied attempting to monopolize the Intel-compatible PC operating system market and trying to illegally maintain that monopoly, arguing that even Jackson said Microsoft might not sustain its monopoly. Attorneys refuted Jackson's finding that Microsoft possesses monopoly power, saying "the arena of competition relevant to decision of this case extends beyond 'Intel-compatible PC operating systems' to encompass all platforms competing for the attention of software developers and users." They also repeated many of the same arguments they made in court, citing potential rivals to Windows, including Apple Computer's operating system and Java.

Tuesday's filing comes as the sides are in the process of holding a series of settlement talks. In November, Jackson appointed Federal Appeals Court Judge Richard Posner to guide both sides during negotiations. Last week, several news outlets reported that the DoJ is proposing breaking the company into several parts.

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