U.S. judge never wanted to order Microsoft split

The U.S. judge presiding over the government’s antitrust case against Microsoft Corp. said Friday that he never did want to order the break up of the company, but was left with no choice when the sides failed to reach a mediation settlement.

“The structural remedy was never my remedy of choice and is not even today,” U.S. District Court Judge Thomas Penfield Jackson said at an antitrust symposium sponsored by the George Mason University School of Law in Washington D.C. “It was always my preference that the market itself be the one to rectify the dysfunctions disclosed by the evidence.”

When attempts to negotiate a settlement ended, Jackson said, “judicial intervention, forcible application of the law became the last resort.” Plaintiffs in the case, he said, wanted the company to be split up and they obtained advice from “multiple consultants who know vastly more about economics and entry markets … than I do.”

The U.S. Department of Justice (DOJ) and 19 state attorneys general successfully sued the software maker, arguing before Jackson that the company behaved anti-competitively and used monopoly power in the operating system market to make illegal inroads into other markets, notably Internet browsers.

Jackson ruled that Microsoft is a monopolist and did indeed use that power to corner other markets, violating U.S. antitrust law. He then ordered a series of behavioral remedies and the break up of the company. Under Jackson’s order the company would be divided into one entity for operating systems and another focused on other applications. Those remedies have been stayed while the case is on appeal.

“Virtually everything I did may be vulnerable upon appeal,” Jackson said.

The appellate court could decide to send the case back to Jackson, so he still possibly could be called on to rule in the matter. He has been criticized by some for commenting publicly on the case, but said Friday that he never did speak out until after he issued his rulings in the case and has not commented on the case’s merits. His desire now in speaking out is to help the public understand the role of the judiciary in the regulation of the software market, Jackson said.

The image of Jackson as regulator does not sit well with the judge, who said he admires those who created Microsoft and has never viewed the case as a contest between himself and Bill Gates, Microsoft co-founder, chairman and chief software architect.

The forceful personalities on both sides of the cases led Jackson to appoint 7th Circuit Court of Appeals Chief Judge Richard Posner as mediator in the case, Jackson said. He wanted a mediator who would command respect from both sides and when he considered all of the people who could be appointed mediator, Posner was the only one who stood out as able to command that level of regard, Jackson said.

While Jackson’s decisions could, by his own admission, be vulnerable now that the matter is with the appeals court, he also thinks that the Microsoft case could lead to new governing processes for antitrust cases involving technology companies.

“From the process, I expect will emerge a new rule of law … a governing process in cyberspace,” he said.