Microsoft loses Supreme Court appeal

  • Anne Gearan / Associated Press
  • Tuesday, October 9, 2001 9:00pm
  • Business

By Anne Gearan

Associated Press

WASHINGTON — Microsoft Corp. lost a long-shot appeal to the U.S. Supreme Court on Tuesday, and all sides said they will focus on settling the government’s long-running antitrust case against the software giant.

The court opted to stay out of the case, ending Microsoft’s hopes for a fresh start as it tries to avoid penalties for anti-competitive behavior. That leaves the case in the hands of a federal judge who has told the company and the government to settle out of court.

"It’s back to settlement," said Robert Litan, a former Justice Department antitrust chief. "This was Microsoft’s long ball that didn’t get completed."

Microsoft asked the high court to hear its complaint that the original federal judge who handled the 78-day Microsoft antitrust trial was biased and all of his findings should be thrown out.

A federal appeals court upbraided U.S. District Judge Thomas Penfield Jackson earlier this year, threw out his order that Microsoft be broken into two companies, and removed him from the case. But the appeals court agreed with Jackson that Microsoft had broken antitrust law and should be punished.

The federal appeals court handed the case over to one of Jackson’s colleagues, U.S. District Judge Colleen Kollar-Kotelly, to set that punishment. She may yet do so, but has made clear she wants the two sides to save her the trouble.

Last month, Kollar-Kotelly set a deadline of Friday to appoint a mediator if the two sides don’t make progress.

Microsoft spokesman Jim Desler said the company is disappointed but not surprised by the high court’s decision. "We’ll continue to move forward with the case on the district court level, and we’ll comply with the court order to work with the government to settle this case," he said.

The Justice Department released a brief statement: "We’re pleased with the court’s decision. We’ll continue our progress in the district court."

The department and 18 states sued Microsoft in 1998, alleging the Windows software maker wielded its dominance in the market to stifle competition and harm consumers.

"We are not surprised the Supreme Court did not take up the matter, because the decision by the D.C. Court of Appeals was unanimous and very well-reasoned," said Iowa Attorney General Tom Miller, leader of a coalition of states pressing antitrust actions against Microsoft.

The Supreme Court did not comment on why it rejected Microsoft’s appeal, and the court’s action does not indicate how the justices view the merits of the case. The court could referee part of the antitrust case if settlement talks fail.

The Supreme Court’s action came just weeks before the company plans to release the newest version of Windows, called Windows XP. Critics say the product raises the same antitrust issues Jackson found compelling in ruling against the company.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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