Court questions some terms of Microsoft antitrust settlement

Ted Bridis

Wednesday, Nov. 5, 2003 | 9:32 a.m.

WASHINGTON -- A federal appeals court on Tuesday pointedly questioned whether the Bush administration's antitrust settlement with Microsoft Corp. adequately protects consumers and competitors from monopolistic abuses.

Legal experts said it was unlikely the six-judge panel from the U.S. Circuit Court for the District of Columbia would accept as adequate only the sanctions that Microsoft accepted under the settlement, given the serious questions that some of the judges raised during a lively three-hour hearing.

"They surprised me," said Robert Lande, a University of Baltimore law professor who has followed the case closely. "I went into this thinking there was little probability they would do anything except rubber-stamp the settlement."

Circuit Judge Judith W. Rogers asked lawyers about how the disputed antitrust settlement denies Microsoft the fruits of its illegal business practices toward its commercial rivals during the late 1990s. She said some penance was necessary; "otherwise, monopolists could squelch all comers without consequence."

The judges questioned whether the settlement has spurred the largest computer makers to install competing software from Microsoft's fiercest rivals, one principal aim of the landmark agreement.

Circuit Judge David S. Tatel said he "may agree" that computer makers still are discouraged from offering such rival software to consumers because Microsoft builds its own versions into its dominant Windows operating system, the engine that runs most of the world's personal computers.

Judge A. Raymond Randolph suggested that computer makers fear confusion among customers over duplicate software programs would raise their technical support costs, cutting into already thin profits.

The appeals court agreed in June 2001 that Microsoft illegally abused its monopoly with Windows software. It was expected to decide in coming months whether the Bush administration and 19 states negotiated adequate antitrust sanctions in a court-approved settlement.

The attorney general in one state, Tom Reilly of Massachusetts, and two anti-Microsoft trade organizations want tougher penalties. Reilly has argued that the settlement was so profoundly flawed that its approval by U.S. District Judge Colleen Kollar-Kotelly represented an abuse of her discretion.

"There's no indication there's going to be a major reworking, but there is some reason to believe that a rubber stamp is not in order, either," said Andrew Gavil, a law professor at Howard University.

Robert Bork, former appeals judge representing Microsoft's rivals, told the circuit judges the settlement was "utterly inadequate." He complained that the government settled the case after it had already won significant courtroom victories, which is highly unusual.

"The government had this case cold, and there was no reason to negotiate away the things it negotiated away," Bork said.

"Don't we owe any deference to the Department of Justice and the judge?" Tatel asked Bork. Bork responded no, and complained that some provisions of the antitrust settlement were too ambiguous to be enforced effectively.

"Some people find ambiguity in a no-smoking sign," Judge David B. Sentelle said.