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. Last Updated: 07/27/2016

Microsoft Has Good Chance of Winning Appeal




WASHINGTON -- For the past two years, Microsoft's leaders and lawyers have responded to every trial setback by saying they will win on appeal.


They may be right.


The landmark antitrust battle now moves to appeals courts that are dominated by conservative, free-market judges who are openly skeptical of U.S. government regulation of business.


For that reason, most legal experts said Wednesday the software giant has a strong chance of avoiding a forced break-up and may well win a complete reversal of Judge Thomas Penfield Jackson's ruling.


Professor Robert Lande, an antitrust expert at the University of Baltimore law school, says he is no fan of Microsoft, but says the company has reason to be optimistic about an appeal.


"I think Microsoft should be broken into four pieces, but I don't think it's going to happen," Lande said. "I can't believe the breakup will survive. They [government lawyers] will be lucky to win on the [findings that there were antitrust violations]."


Microsoft's appeal is not a slam-dunk. University of California law professor John Shepard Wiley Jr., says the findings are so detailed and exhaustive that Microsoft will be hard pressed to refute them. "Microsoft is going to have to be battling finding by finding," he said. "There are 207 pages of finding of fact, and if you think every one of them is wrong, the magnitude [of proving that] presents a real challenge."


And a partial victory may not be good enough for Microsoft. If the company is ultimately judged to have violated antitrust laws, that ruling will leave the software maker vulnerable to private lawsuits filed by its competitors and its customers.


That's why the company's lawyers will be pressing hard to win a clear reversal during the appeals.


"Whichever higher court looks at this thing, we are confident that we'll succeed on appeal," chairman Bill Gates said at the company's headquarters.


Legal experts say appellate judges f and the U.S. Supreme Court f will have to grapple with two key issues:


How aggressively can Microsoft defend its dominant position? The software maker used a number of strategies to fend off challengers, the most important tactic being its use of exclusive contracts, particularly with America Online. Wiley, who teaches antitrust law to federal judges, said that "not only is the law on exclusive contracts old and vague, but it certainly doesn't apply or hasn't been applied to a high-tech context."


Was Microsoft's decision to give away its Internet Explorer browser, and combine it with its Windows operating system, predatory conduct or beneficial to consumers? Jackson ruled that Microsoft's "gift" was not a fair, competitive tactic and that the only reason Microsoft set the browser's price at zero was to kill the competition. Wiley calls the question "a difficult one because rapid product improvement and falling product prices is what happened in this marketplace. Microsoft said, 'See, we helped consumers. They've been the beneficiaries.' The appeals court will have to decide."


Ordinarily, the next stop in this case would be the U.S. Court of Appeals for the District of Columbia. Six of its 10 judges are appointees of presidents Ronald Reagan and George Bush, and it has already sided with Microsoft in two earlier issues.


Not surprisingly, both the Justice Department and Judge Jackson would prefer to bypass the conservative appeals court and take the case directly to the U.S. Supreme Court. And a special law governing antitrust appeals allows just that.


It says if the trial judge believes the case has a "general public importance" he can recommend immediate review by the high court. However, it is up to the justices as to whether they agree to hear the case or send it back to the court of appeals.


Most experts who have followed the case say they think it is more likely than not that the high court will avoid the dispute f for now.


"There's only a remote possibility the Supreme Court will take it up now," said Boston University Law School dean Ronald Cass. "There's a huge factual record, and the remedies will be stayed pending the appeals. So, if you are a Supreme Court justice, why would you want to get involved now?"