Microsoft Appeals Breakup Order

Tuesday, November 28th 2000, 12:00 am

By: News On 6

WASHINGTON (AP) â€” Seeking to keep its business intact, Microsoft filed legal briefs Monday alleging the federal judge who ordered its breakup compromised the ``appearance of impartiality.''

In its first filing with the U.S. Court of Appeals for the District of Columbia, which now has custody of the landmark case, Microsoft lambasted U.S. District Judge Thomas Penfield Jackson as a biased judge who thrust himself into the dispute rather than resolve it impartially.

``By repeatedly commenting on the merits of the case in the press,'' the company's brief argued, ``the district judge has cast himself in the public's eye as a participant in the controversy, thereby compromising the appearance of impartiality, if not demonstrating actual bias against Microsoft.''

A spokeswoman for Jackson said the judge had no comment on Microsoft's statements.

``Believe me, I have no grudge against Microsoft,'' Jackson said in an interview with The Washington Post just days after his June ruling. But in the interview, rare for a federal judge, he said he had little choice but to accept the government's breakup proposal.

And in a speech to an antitrust conference in New York in late September, Jackson said his order was a last resort forced by the company's unwillingness to make changes voluntarily.

Microsoft on Monday asked the appellate court to overturn Jackson's order in June that the company be broken into two parts. If the higher court calls for a new trial, Microsoft wants someone other than Jackson to preside.

Monday's brief was the latest volley in a long-running battle that could result in the largest government ordered restructuring since the 1984 breakup of AT&T.

Microsoft's brief asked the federal appeals court to find that Jackson was wrong in concluding that the software giant was an unfair monopoly, and reverse his breakup order.

``The case went awry from the outset,'' said company spokesman Vivek Varma, ``and our appeal provides a comprehensive picture of why Microsoft should win this case.''

Said Justice Department spokeswoman Gina Talamona: ``The judgment is well supported by the evidence offered during a 78-day trial, including thousands of pages of Microsoft's own documents. We are confident in our case and look forward to presenting it to the Court of Appeals.''

Microsoft said its ``competitive response'' to the takeoff of widespread Internet use, and Web browser rival Netscape, ``produced enormous consumer benefits'' and did not illegally conquer its market, as the government charged.

``The District Court branded Microsoft's conduct anticompetitive, even though it recognized that Microsoft did not foreclose Netscape from the marketplace,'' it said.

Netscape Corp.'s Navigator software was the standard Internet browser until Microsoft's Internet Explorer took over. The government has maintained that when Microsoft integrated its Windows operating system with Internet Explorer, it pushed competitors like Netscape out of the market.

On Jan. 12, the government is due to file its brief with the appeals court. Microsoft will have a chance to reply by the end of January, and oral arguments in the landmark antitrust case are set for late February. Jackson's ruling came in early June.

The Justice Department, suing Microsoft along with several state attorneys general, had wanted the case passed directly to the Supreme Court, citing a long-standing law that allows such high-profile cases special consideration, but the high court refused.

Meanwhile, the Association for Competitive Technology filed a ``friend of the court'' brief for Microsoft. ACT, founded in 1998 at the time the federal government's effort against Microsoft was escalating, has frequently defended the Redmond, Wash.-based firm.

ACT argued that Microsoft improved its products by fusing them together, rather than bundling its operating system and Internet browser together to shut out competitors, as the court concluded.

The group also said that splitting the company in two â€” one part managing with the Windows operating system and another comprising everything else the company controls â€” would hurt the market by eroding the industry standard. Windows runs on more than 90 percent of the world's personal computers.

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On the Net:

Microsoft: http://www.microsoft.com

Association for Competitive Technology: http://www.actonline.org

U.S. Court of Appeals for the District of Columbia: http://www.cadc.uscourts.gov

Justice Department: http://www.usdoj.gov