Microsoft Settlement Defended in Federal Appeals Court

In a lengthy and contentious hearing, the Microsoft Corporation and the Justice Department defended their attempt to settle antitrust charges before a panel of three Federal appeals court judges. The judges repeatedly questioned the software giant and its opponents, expressing skepticism about the proposed deal. Opponents of Microsoft argued that the settlement was too lenient, while the Justice Department maintained that it was in the public interest.

Key Takeaways:

• The Justice Department conceded that the agreement was not as tough on Microsoft as it could have been, but insisted that it was within "the reach of the public interest."
• Opponents of Microsoft, led by lawyer Gary Reback, argued that the settlement was too tame and failed to correct the company's efforts to stifle competition.
• Both sides took their lumps from the panel of judges, with Justice Department lawyers admitting that the settlement could have been tougher on Microsoft.
• The panel of judges questioned the anonymity of Reback's clients, who refused to reveal their identities, supposedly due to fear of reprisal from Microsoft.
• Judge Laurence H. Silberman expressed concern that Reback's approach would create an "enormous disincentive for the assistant attorney general" to settle cases.
• Microsoft's market dominance in personal computer software was highlighted, with Chief Judge Harry T. Edwards stating that Microsoft's products were on 70% of computers.

Statistics:

• The Justice Department has been investigating Microsoft for four years.
• The proposed settlement was reached out of court last summer.
• The cost of a trial and subsequent appeals would amount to $25 million, according to Judge Silberman's hypothetical scenario.
• Microsoft's lead lawyer, Richard Urowski, conceded that the company's products were popular, but noted that they were on 70% of computers.

Sources:

• The New York Times
• The Washington Post
• Associated Press