Server market eyed in Microsoft legal case

February 26, 2001, 4:31 PM — Microsoft Corp. and U.S. government attorneys will lock horns again this week, this time to focus on the future of the company and whether a breakup of Microsoft -- splitting its operating systems from its applications business -- will protect competition in other markets in which the company competes.

Government Headaches Seven judges are expected to hear Microsoft’s appeal. The government faces the following problems: Tying Applications: Trial Judge Thomas Penfield Jackson ruled that Microsoft illegally tied its browser to its operating system. But a 1998 order by two appeals court judges found benefits to integrating the browser with the operating system. Remedy: Jackson didn’t hold a hearing on his breakup order. Microsoft says the judge acted carelessly. Out-of-Court Conduct: Jackson’s comments about Microsoft, in which he reportedly compared company executives to drug dealers, among other things, may help the company.

The two sides will appear in the U.S. District Court of Appeals to argue over the merits of a lower court ruling last year that found the company in violation of antitrust law and ordered its breakup.

Critics of Microsoft, such as the Computer & Communications Industry Association (CCIA), a Washington-based trade group whose members include Sun Microsystems Inc. and Oracle Corp., voiced concern about the future.

Ed Black, president of the CCIA, contended that Microsoft is "poised to capture the central nervous system" of corporate America