Sanctions against Microsoft expected

By Patrick Thibodeau, InfoWorld |  Operating Systems

WITH CLOSING arguments over and no potential settlement on the horizon, it is now up to Microsoft antitrust trial Judge Thomas Penfield Jackson to issue a verdict, and he did little last week to dispel the expectation that he will come down hard on the software giant.

Jackson asked numerous questions of both sides but was particularly tough on Microsoft. Government attorneys are anticipating a strong verdict in their favor and plan to ask for severe sanctions.

"Remedies have to be drastic and far-reaching because the findings of this conduct and [the] predatory practices are so serious and significant," Connecticut Attorney General Richard Blumenthal said.

Most telling about Microsoft's future may have come when the judge compared the company's power over its operating system with the power John D. Rockefeller once had over oil, citing the 1911 Standard Oil case. The courts broke up Standard Oil, and government attorneys are considering the same remedy for Microsoft.

"Mr. Rockefeller had fee simple control over his oil," Jackson said, using a term that describes unlimited control over property. "I don't see the distinction."

The judge's mention of the Standard Oil case underscored government arguments that antitrust laws developed to handle manufacturing also apply to so-called new-economy companies.

However, in a report last week in The Washington Post, Harvard law professor Lawrence Lessig was quoted as saying he was "skeptical" of a breakup of the company. Jackson has relied on Lessig for technological and antitrust assistance in the trial.

Lead government attorney David Boies offered a litany of alleged antitrust violations, such as making inducements and threats to competitors. He assured Jackson that a verdict against Microsoft would pass the ultimate legal test: an appeal to the U.S. Supreme Court.

John Warden, Microsoft's chief trial attorney, argued that the company did not violate laws. He also said the industry has changed since the case was brought, and warned that the wrong decision could endanger U.S. economic prosperity.

"The success of this industry ... is by common acknowledgment the engine that has driven the nation's unprecedented economic expansion," Warden said.

Jackson appeared particularly critical of the company's legal arguments that copyright law gives it control over how PC makers can use the Windows OS, telling Warden he had problems with the arguments.

Jackson also questioned the government's claim that Microsoft illegally tied its browser to its operating system. A 1998 appeals court ruling said Microsoft could perform this integration.

Sources close to the settlement talks are not optimistic that a settlement will be reached.

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