February 27, 2001 10:15 AM PST

Judges hammer government, Jackson in Microsoft case

WASHINGTON--In the second day of questioning in the Microsoft antitrust case, appellate judges called into doubt a lower court's ruling that led to the recommendation to break up the software giant.

In Tuesday's opening session before the U.S. Court of Appeals for the District of Columbia, Chief Judge Harry Edwards questioned whether U.S. District Judge Thomas Penfield Jackson?s findings of fact sufficiently defined what he called "the browser and platform market."

The District Court slipped back and forth on the relevant market, Edwards said. He added that Jackson?s "findings are absolutely unclear," accusing him of "sleight of hand."

Edwards hammered government attorney David Frederick during the opening session, which addressed whether Microsoft attempted to extend its operating system monopoly to Web browsers.

"The District Court made no definition of the relevant market?? Edwards asked.

"I would concede that, your honor," Frederick replied.

Judge Stephen Williams also rapped Frederick on this point, arguing that Jackson failed to make his findings on the browser market definition even though the government proposed one. Williams stunned the courtroom when he said, "we would have to send them back to some trial judge."

Williams' comment suggested that if any portion of the case is sent back to the District Court, Jackson could be removed from handling the case.

During an all-day hearing Monday, the judges discussed Jackson's famed findings of fact and how much of a role they should play in the current hearing. The findings, a 200-plus-page document issued in November 1999, ultimately led to Jackson's ruling that the company violated several aspects of antitrust law and needed to be broken up.

The seven-judge appellate panel is considering Microsoft's appeal of Jackson's ruling, which came down last June. Jackson ordered a breakup of the software giant, finding that Microsoft engaged in a pattern of predatory behavior and that remedies were needed to restore competition.

Legal experts have warned that Jackson's ongoing comments about the case--some of which were leveled at the Court of Appeals--had undermined the government's victory. They also warned that whatever the outcome of the appeal, Jackson would likely be removed from the case should any portion be sent back to the District Court.

In pursuit of the facts
In Tuesday morning's session, Edwards and Frederick volleyed over the facts that are contained in Jackson?s findings.

Referring to comments made Monday and during the Tuesday session, Frederick told the judge, "You cited things in the record that were not correct."

This lead to a fierce exchange about testimony regarding Netscape?s business plans for its Web browser.

Edwards also questioned the government?s assertion that Microsoft attempted to divvy up the browser market with Netscape during a June 21, 1995, meeting. "How do you contend there's any dangerous probability of success even if they reached a deal?" Edwards asked Frederick.

Edwards cut off Frederick?s response, saying the government had incorrectly blurred the browser and platform markets. "They are separate markets," Edwards said. "You can?t have it both ways."

Frederick also took the hot seat during the second session of the morning. At issue: Jackson?s handling of the remedies portion of the case and his order that Microsoft must be broken into two companies.

Microsoft attorney Steve Holley earlier contended that Jackson did not give Microsoft appropriate time for due process to respond to the government?s remedy proposal. This argument seemed to resonate with the judges, many of whom hammered Frederick on this issue.

Defining terms and time limits
The government?s attorney argued that Microsoft failed to properly ask for further evidentiary hearings on the remedy. But Edwards, reading from a transcript of an April 4, 2000, meeting in the judge?s chambers, suggested that Jackson led Microsoft to believe it could wait until after the government proposed remedies before responding.

Frederick argued that Microsoft failed to take the proper opportunity to respond.

"Are you arguing they waived their right to an evidentiary hearing?" judge A. Raymond Randolph asked.

"'Waive' is too strong a response, Judge Randolph," Frederick responded.

Judge David Sentelle also asked if the government believed the breakup order should stand if the appeals court overturned any portion of the case.

"Your honor, I know you like ?yes? or ?no? answers. My answer is 'it depends,'" Frederick said.

Judge Douglas Ginsburg pushed harder, asking specifically about the government?s claim that Microsoft had illegally tied, or integrated, Internet Explorer to Windows 95 and Windows 98.

"If that?s out, I don?t know if we could be confident on what the District Court would have done," Ginsburg said.

ZDNet's Sean Silverthorne contributed to this report.

 

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