Microsoft and the Justice Department Face Pressure to Settle Antitrust Charges

Strategic Insights -

Thomas Penfield Jackson, the trial judge, has appointed Richard Posner, a federal appeals court judge and antitrust expert, as mediator for renewed settlement talks between Microsoft and the Justice Department. Judge Posner's appointment raises hopes for a quick settlement, as his conservative brand of jurisprudence associated with the University of Chicago strikes fear in the hearts of both sides. His writings on antitrust caution against aggressive remedies and highlight the risks of government-imposed breakups of monopolies.

Key Takeaways:

  • Judge Penfield Jackson's initial ruling labeled Microsoft a bullying monopolist, but the company is likely to appeal and could win on appeal.
  • Microsoft faces private lawsuits, which provide a potential bonanza for lawyers and a nightmare for the company, but the threat of private lawsuits may not provide an incentive for Microsoft to settle now.
  • Judge Posner's appointment will bring his expertise in antitrust law to the settlement talks, including his writings on the risks of aggressive remedies and the importance of giving deference to trial judges.
  • Judge Posner will also point out that the appeals court may be more hostile to the government's case than Judge Jackson and that there is a gray area in Judge Jackson's initial ruling that the appeals court may decide differently on.
  • Microsoft is squirming under the pressure, and Judge Posner's appointment may force the company to settle to avoid a worse outcome on appeal.

Statistics:

  • The government's antitrust charges against Microsoft have been ongoing for several years.
  • Judge Jackson's initial ruling found that Microsoft's licenses with equipment manufacturers and Internet companies went too far in shutting competitors out of important markets.
  • The appeals court includes prominent conservative justices who may be more hostile to the government's case than Judge Jackson.
  • The potential damages from private lawsuits could be a significant factor in Microsoft's decision to settle.

Sources:

  • William Kovacic, an antitrust expert at the George Washington University Law School.
  • Richard Posner, a federal appeals court judge and antitrust expert.
  • Judge Thomas Penfield Jackson's initial ruling on Microsoft's antitrust charges.
  • The writings of Richard Posner on antitrust law.