APPEALS court refuses to delay case against Microsoft, clearing way for penalty

<br>WASHINGTON (AP) _ A federal appeals court Friday refused to delay the government's case against Microsoft, clearing the way for a new judge to decide what penalty the software giant should face

Friday, August 17th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ A federal appeals court Friday refused to delay the government's case against Microsoft, clearing the way for a new judge to decide what penalty the software giant should face for antitrust violations.

The Supreme Court, however, still may decide whether to take up Microsoft's appeal. That decision is expected as early as October.

Microsoft had argued that U.S. District Judge Thomas Penfield Jackson was biased, and that his interviews given to reporters tainted the case. Microsoft said the case should have been taken away from Jackson at the point of the first interview _ which would have eliminated Jackson's verdict.

Microsoft said that if the appeals court didn't put the case on hold, it would jeopardize public faith in the judicial system. The appeals court unanimously disagreed.

``Microsoft has failed to demonstrate any substantial harm that would result from the reactivation of proceedings in the district court,'' the U.S. Court of Appeals for the District of Columbia ruled.

``It appears that Microsoft has misconstrued our opinion, particularly with respect to what would have been required to justify vacating the district court's findings of fact and conclusions of law,'' the court wrote.

The court ruled that the case should be returned to district court in seven days, where a new judge will be picked at random. The judge will decide how Microsoft should be penalized for its anticompetitive practices.

The penalty, which is likely to come after a hearing process, could require simple changes in Microsoft conduct or a breakup of the Redmond, Wash., company. Jackson ordered the company split in two, but that portion of his ruling was overturned by the appeals court in June.

``We are pleased with the court's decision and look forward to proceedings in the district court,'' said Justice Department spokeswoman Gina Talamona.

Microsoft spokesman Jim Desler said the company was disappointed with the ruling, and was still hoping the case could be settled out of court.

``While we believed the process was best served through a stay, we were prepared to move ahead with getting the remaining issues in the case resolved while we await word on Supreme Court review,'' he said.

The Justice Department and 18 states claim Microsoft stifled competition among software makers in the lucrative personal computer market. Microsoft shouldered competitors aside and harmed consumers by limiting their choices, the government's antitrust suit said.

Microsoft's Supreme Court appeal deals solely with Jackson. In interviews with newspaper reporters and book writers, Jackson offered his colorful take on the case, likening Microsoft's Bill Gates to Napoleon and the company to a drug-dealing street gang.

Meanwhile, Microsoft could be finished its new Windows XP operating system within days. That product, which will reach store shelves in October, includes many features that mirror those of current stand-alone products made by competitors. Rivals and state attorneys general are examining the product, and will decide whether to try to challenge it in court.

The appeal's court decision was widely predicted by legal scholars, several of whom think that Microsoft is playing for time in order to protect Windows XP's release.

``It's pretty clear that they saw this as nothing more than a Microsoft delaying tactic,'' said University of Baltimore law professor Bob Lande, ``and they weren't going to let Microsoft get away with it.''