The U.S. Court of Appeals for the
D.C. Circuit also ordered U.S.
District Court Judge Thomas
Penfield Jackson removed from
the case.

Microsoft shares were up $3.82,
or more than 5 percent, at $74.96
before being halted. Shares have
yet to reopen.

Jackson last summer ordered
Microsoft (MSFT: news, msgs,
alerts) split into two non-affiliated
companies - a Windows firm and
an applications software firm -- to
remedy the violations of U.S.
antitrust laws he found after a lengthy trial.

He also set significant restrictions on Microsoft's conduct, but stayed the entire order
pending the final outcome of the appeals process.

The appeals court ruling leaves open questions about the ultimate fate of the case,
which was initiated three years ago this month by the Clinton Justice Department and
20 state attorneys general.

Speculation has mounted that the Bush administration would await the appeals
ruling, then seek a negotiated settlement with the software giant that would avoid a
break-up.

Microsoft, in written briefs, argued that Jackson's ruling was "infected with error" and
disputed almost every aspect of the judge's findings and the government's case.

The government stood by Jackson's findings that Microsoft illegally used the power of
its Windows monopoly to sideline competitors, such as Netscape. Microsoft has
maintained that Windows is not a monopoly, much less one that was used to prey on
competitors.

Monopolies, per se, are not illegal. Antitrust laws prohibit companies from using a
monopoly in one area to stifle competition in another.

Basically, Jackson found that Microsoft bullied its partners by implicitly threatening to
withhold or restrict access to Windows unless they favored Microsoft products, such
as the Microsoft Explorer browser.

In a key finding, Jackson ruled that Microsoft illegally welded its Explorer browser to
Windows in order to thwart Netscape. Microsoft, citing a ruling in an earlier antitrust
case that saw the appeals court overturn Jackson, had argued during the trial and in
its appeal that it hadn't violated antitrust law by bundling the browser with the
operating system.

Jackson ruled that the earlier appeals ruing didn't apply to the case and instead cited
a Supreme Court precedent.

The appeals court heard two days of oral arguments on the appeal in February - an
extraordinary amount of time in an appellate case. The judges also accepted
expanded written arguments from both sides.

Living up to their fearsome reputations, the appeals judges raked lawyers for both
sides over the coals during the arguments. Government lawyers, however, were put in
a particularly tight spot the final day of arguments, with almost the entire judicial panel
forcing the lawyers to defend statements made by Jackson to the press and in public.

Jackson, in interviews with various news organizations, likened Microsoft Chairman
Bill Gates to Napoleon and said the company's dismissive attitude toward the case
reminded him of the remorseless mindset held by members of a criminal drug gang
whose trial he had once presided over.

Chief Judge Harry Edwards, an authority on judicial ethics, was particularly withering.

"We don't run off our mouths in a pejorative way ... The system would be a shambles
if all judges did that," Edwards said.


Court Reverses Break-Up of Microsoft

By D. IAN HOPPER, AP Technology Writer

WASHINGTON (AP) - A federal appeals court reversed the
breakup of Microsoft Thursday and ordered that a new judge
decide the landmark case. It was a major victory for the
embattled software maker.

The appeals court ruled that U.S. District Judge Thomas
Penfield Jackson improperly conducted himself in the case,
leaving himself open to the appearance he was biased against
Microsoft.

``We vacate the judgment on remedies, because the trial judge engaged in impermissible
ex parte contacts by holding secret interviews with members of the media and made
numerous offensive comments about Microsoft officials in public statements outside of the
courtroom, giving rise to an appearance of partiality,'' the court said.

 

hah, take that aol/netscape.

 

Big PARTAY in WA tonight, I'd imagine!!

 

My side (the side of good!) will ultimately win in this case. Sorry, mom!

 

Mine was a separate Supreme Court win !!!

 

It's EVERYBODY's issue, even Gina, Jason, and the other Mac-heads.

 

I have no option other than MS unless I want a $5000 workstation. That would really defeate the purpose for me. Also, I have to get MS Works; every PC that I looked at this morning has that bundled. Uggg. That's not right. The cost of MS Works is included in there somewhere and I don't want it!

For what it's worth, I'm buying Penguin Computing machines now. They have a really nice 1U P3 machine that we use for our testing. If they only had Athlon processors . . .

 

i have to say, as much as i think microsoft products suck, govm't had no right to order break up.

 

intervention from a bunch of publicity seeking Attorneys General, most of whom have further political ambitions...don't forget that's where this whole case started. And, I did follow the case, and Judge Jackson made some unthinkable moves in the case, this overturn is not a surprise to me. Only people here winning anything are the lawyers charging a gazillion dollars in fees that will be passed through to the consumer.

 

it's not gates' fault that corporate america had bad judgement (grin)