Yesterday's out-of-the-blue court decision that stalls the breakup of Microsoft Corp. is a clear-cut victory for the software giant - but perhaps only a temporary one.
A US court of appeals did not settle Microsoft's future, but ordered that a new judge be assigned to decide what penalty the firm should pay for monopolizing a segment of the software market.
In doing so, the appeals court in the District of Columbia rapped the knuckles of federal Judge Thomas Penfield Jackson, who presided over the US government's antitrust case against Microsoft. Judge Jackson's actions, the court said, "seriously tainted the proceedings before the District Court and called into question the integrity of the judicial process."
This development poses a dilemma for the Bush administration, which has shown less zealotry in pursuing Microsoft than did the Clinton team. Still, "there is a large staff over at [Department of] Justice with a very large stake in the case," says Bert Foer, president of the American Anti-Trust Institute. "It's going to be impossible for the Bush administration to completely walk away from this case."
One possibility, Mr. Foer says, is that the administration will craft a settlement in which Microsoft remains intact but agrees to change some of its marketing strategies.
At the conclusion of last year's trial, Microsoft was found to have engaged in anticompetitive practices by packaging its Windows operating system with its Explorer Web browser.
To appeal or not to appeal
If President Clinton were still in office, an appeal would probably have been filed immediately to the nation's top court. That may yet occur: Although Bush officials are regarded as "antitrust minimalists," Attorney General John Ashcroft is regarded as no big fan of Microsoft.
If he decides to appeal the case to the US Supreme Court, the battle with Microsoft is not over. If his team opts to reargue the case in a lower court, Microsoft may have won.
"This is not really the big victory for Microsoft that it appears to be," says Norm Hawker, an antitrust expert at Western Michigan University in Kalamazoo. "Microsoft got a big win in terms of avoiding the breakup," but the court did not alter two key findings by Judge Jackson.
First, the verdict that Microsoft acted illegally as a monopoly still stands. Second, the company is found to have violated antitrust laws.
"Those two findings alone spell real troubles for Microsoft, …