WASHINGTON _ Microsoft Corp., beset by battles with government
regulators, won a legal victory Friday when a federal appeals
court approved a settlement over anticompetitive marketing
practices _ and rebuked a federal judge who emerged as a powerful
critic of the computer software maker.
The U.S. Court of Appeals for the District of Columbia Circuit
said a lower court judge should not have rejected an antitrust
settlement between the Justice Department and Microsoft, the
largest personal computer software company.
The pact required Microsoft to alter contracts with personal
computer manufacturers that allegedly shut out competing
operating system software.
More significantly, the appeals court disqualified U.S.
District Judge Stanley Sporkin, saying he exceeded his authority
by attempting to broaden the case. The three-member appeals court
returned the case to a different lower court judge with a
recommendation for approval.
Wall Street welcomed the development, sending Microsoft stock
up $2.12 to close at $87 a share on the Nasdaq Stock Market on
heavy volume of 5.8 million shares.
Legal experts said the outcome wasn't surprising given the
controversial nature of Sporkin's decision, which the Justice
Department earlier called "an invitation to anarchy in the
enforcement of antitrust law." Sporkin, in a brief telephone
interview, declined comment, saying he was still reading the
But the significance could be overshadowed by a new Justice
Department antitrust investigation of Microsoft, announced last
week, into its proposed on-line network and software patent
"If the government takes action on the network and patents,
then this decision is not of significance for the industry," said
Gary Reback, a Palo Alto, Calif.-based attorney representing
software companies highly critical of Microsoft.
Just last month, Microsoft dropped its planned $2 billion
merger with personal finance software Intuit Inc. after the
Justice Department sued to block the merger.
Kimberly Ellwanger, a senior corporate attorney for Microsoft,
said the company was "absolutely delighted with today's
decision," which resolves a major portion of the government's
4-year investigation of its business practices.
At issue was so-called "consent decree" the Justice Department
and Microsoft reached last July concerning Microsoft's licensing
agreements with personal computer makers. …