U.S. government officials argue MS case go to Supreme Court

In a brief filed yesterday, government officials said the Microsoft Corp. antitrust case should go directly to the U.S. Supreme Court because of its “immense importance to our national economy,” particularly among high-tech industries, which will have trouble planning for the future until this case is resolved.

In a 30-page brief posted on the U.S. Department of Justice (DOJ) Web site early yesterday afternoon, government officials said expediting the case “is especially important to the rapidly developing high-technology sectors, which need to know how they will be affected by the remedies resulting from this case and, more generally, how this court’s antitrust jurisprudence applies to a dominant firm in their marketplace.”

The government also said, “The public interest requires prompt and final resolution of the issues on appeal, both so that effective remedies can be put in place to restore competitive conditions and protect consumers and so that the computer and software industries can plan for the future.”

The DOJ, along with the 19 states that are part of this lawsuit, was responding to Microsoft’s July 26 brief, arguing against an expedited appeal before the Supreme Court. Citing the “sheer number” of legal arguments that the company plans to raise on appeal, as well as the complexity of the technical issues raised in the case, Microsoft said the case was “completely unsuitable for direct appeal.”

Microsoft, which is fighting a court order to split the company in two, wants the appeal to go to the U.S. Court of Appeals before it inevitably ends up in the Supreme Court. The company is scheduled to respond to the government’s argument on Aug. 22.

On June 7, U.S. District Judge Thomas Penfield Jackson ruled that Microsoft broke antitrust law to preserve its monopoly in PC operating systems. The judge ordered a breakup of the firm that would separate its operating system business from its applications, server and other operations. The judge also imposed a series of interim conduct restrictions on the company, pending the ultimate breakup. But Jackson stayed all these remedies, pending appeals.

Microsoft spokesman Jim Cullinan wouldn’t comment on the specifics of the government’s brief and will instead save the company’s ammunition for the brief it will file next week, he said.

“We continue to believe that the Supreme Court would benefit from an initial review of this very complex and technical appeal by the Court of Appeals,” said Cullinan.

One analyst said there’s some legitimacy to the government’s argument concerning the case’s impact on the high-tech industry.

“Any type of a cloud over the market does things like defer buying decisions,” said Rob Enderle, an analyst at Giga Information Group Inc. in Cambridge, Mass. The case “provides what I would call a significant drag on the industry by putting a cloud over the planning process,” he said.

Some vendors are gambling on the outcome, said Enderle. “Right now they are enhancing their Linux plays because they are anticipating a much weaker MS. If that is not the outcome, then these efforts and those people are exposed,” he said.

The case is also beginning to have an impact on corporate information technology planning decisions, according to a recent exclusive Computer poll of information services executives: 22 per cent of the 104 people surveyed said the antitrust case was becoming a factor in their IT planning over the next two years.

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