Supreme Court declines to stall possible penalties against Microsoft

  • Anne Gearan / Associated Press
  • Monday, October 8, 2001 9:00pm
  • Business

By Anne Gearan

Associated Press

WASHINGTON – The Supreme Court said Tuesday it will not grant Microsoft Corp. another chance to avoid punishment for antitrust violations associated with its widely used Windows computer software.

The court, without comment, declined to accept an appeal from the computer giant that would have forestalled yet-unspecified penalties. The case is now in the hands of a lower court judge.

The court’s action does not indicate how the justices view the merits of the Microsoft case, and the court could yet referee part of the long-running court battle. It does represent a setback for Microsoft, and a victory for the Justice Department and 18 states pursuing claims that Microsoft abused its monopoly power to curb competition and harm consumers.

The Supreme Court appeal was a question mark hanging over court-ordered settlement talks. Last month, U.S. District Judge Colleen Kollar-Kotelly ordered round-the-clock talks to try to settle the case. She said she will appoint a mediator on Friday if necessary.

Kollar-Kotelly cited the economic fallout from terror attacks as one reason for haste. “There’s no reason this case can’t be settled,” she said.

Microsoft spokesman Jim Desler said the company is disappointed by the high court’s action. “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.”

Microsoft had asked the high court to hear its complaint that the original federal judge who handled the 78-day Microsoft antitrust trial should be disqualified along with all his conclusions about Microsoft’s conduct.

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.

Microsoft argued that Jackson’s comments to reporters about the case were an ethical breach that revealed his bias and tainted his rulings against the company. The appeals court should have tossed out the whole case as a result, Microsoft argued to the Supreme Court.

That legal question was the only issue before the justices. In legal papers filed with the court, Microsoft also raised several antitrust issues that company lawyers may bring back before the justices later on.

The Supreme Court had not been expected to take the case, in large part because it is still in flux in lower courts. The high court typically likes to wait until it has a clear legal field before stepping into a case.

Microsoft claimed the appeals judges applied the wrong standard when it reviewed the effect of Jackson’s remarks critical of the company and its founder, Bill Gates.

Microsoft said Jackson should have been disqualified from the case when he gave his first interview. If that had happened, Jackson’s entire final verdict would have been thrown out.

The federal appeals court dismissed that argument in its June ruling.

“The threat that the judge’s misconduct poses to the public’s perception of judges and the process of judging is palpable,” Microsoft wrote.

Federal and state prosecutors argued that Microsoft should be punished quickly for its monopoly behavior, and there was no reason for the high court to step in now.

The court’s action came a couple of weeks before the company plans to release the newest version of Windows, a product company critics say raises the same antitrust issues Jackson found compelling in ruling against the company last year.

Solicitor General Theodore Olson, the Bush administration’s top Supreme Court lawyer, urged the high court to stay out of the Microsoft case for now. The court should not entertain “multiple, piecemeal requests for review,” Olson wrote.

“There is no warrant for further delay,” Olson wrote.

Antitrust experts widely saw Microsoft’s Supreme Court appeal as a delay tactic intended to buy the company time until its new operating system gets to the market.

Congress and several state attorneys general have asked Microsoft to change Windows XP, saying that it would repeat many of the same business practices already found to be illegal and would force consumers to use more Microsoft products.

Microsoft maintains that it is only providing the features consumers want, and that its customers will benefit from Windows XP.

This is the second time the antitrust case has reached the Supreme Court. After the company appealed Jackson’s ruling last year, the Justice Department wanted a fast track straight to the Supreme Court, bypassing the appeals court. Microsoft objected, and the justices denied the government’s request.

The case is Microsoft Corp. v. United States, 01-236.

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

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