August 19, 1998 3:25 PM PDT

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A federal appeals court today sided with Microsoft and allowed pretrial depositions of CEO Bill Gates and other top executives to begin without the public or the media present in the landmark antitrust case against the software giant.

A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit overruled an earlier decision by U.S. District Judge Thomas Penfield Jackson. The appellate court did not make a final ruling today, however, leaving room for the public to view the private depositions at a later time.

"The balance of harm favors [Microsoft]," the court decided. "If [Microsoft] prevails, the disclosure could not be undisclosed, whereas if [the news media] prevails, the text and videotape of a private deposition can then be disclosed."

Jackson reluctantly ruled this month that the public and news organizations should be allowed to sit in on the depositions, based on a rarely invoked 1913 law that applies only to civil antitrust cases. But Microsoft, concerned that valuable trade secrets and other confidential corporate information would become public record, argued that the law only applied to depositions taken in lieu of trial testimony.

"We are gratified by today's decision and will continue to move ahead with preparations for the trial, including depositions of Microsoft executives and third parties, as soon as possible," Microsoft spokesman Tom Pilla said. "The court's ruling will allow the depositions to move forward without delay and in the same manner they've already been taken in this case."

About 20 third-party deponents already have been questioned by government attorneys in the broad antitrust case Microsoft is fighting.

The Justice Department and 20 states allege that Microsoft illegally has used its dominance in the desktop computer operating system market to gain a monopoly in other business areas, particularly the Web browser market.

The ruling is a clear victory for Microsoft. On the losing side of the decision are media organizations including the New York Times, the Seattle Times, Reuters America, Bloomberg, ZDNet, and ZDTV, all of which requested access to the depositions.

The Justice Department, for its part, said today's decision will have little effect on its plans for the case. "The court order is clear, and we'll proceed in accordance with it," department spokeswoman Gina Talamona said.

Microsoft has asked Jackson to throw the case out altogether. Barring that unlikely scenario, the trial is still slated to begin September 8.

Sources have indicated that the case could be delayed by up to two weeks, but today's ruling may speed the proceedings along. Neither Microsoft nor the DOJ will speak publicly about a possible delay.

Talamona said a status hearing is scheduled for 8 a.m. PT tomorrow, at which time Jackson will discuss all the outstanding issues in the case.

 

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