High court ruling on Microsoft delays firm's breakup

The Supreme Court on Tuesday sent the Microsoft antitrust case to an appeals court, effectively delaying efforts by the government to break the software giant into two parts.

The decision amounted to a tactical victory for Microsoft in the drawn-out legal battle. It had asked the justices to take that course. The Justice Department wanted the nation's highest court to bypass that step and hear arguments this winter over whether the company must be broken up.

The court voted 8-to-1, with Justice Stephen G. Breyer dissenting. "Speed in reaching a final decision may help create legal certainty," Breyer wrote, arguing the Supreme Court should hear the case now.

Microsoft is seeking to overturn a US district judge's ruling that it engaged in illegally anticompetitive conduct. In June, Judge Thomas Penfield Jackson ordered the firm split in two, but he postponed enforcement of the decree during Microsoft's appeal.

"This is a serious setback for the government," says William Kovacic, a George Washington University law professor and antitrust expert. "Their strategy was to speed this case to resolution as quickly as possible .... I think the government gambled and failed. At this point, I think the possibility of breakup is next to zero." He said it might be a good time for the government to go back to the bargaining table with Microsoft.

Government lawyers, officially at least, were nonplussed by the high court's ruling. "We look forward to presenting our case to the Court of Appeals as expeditiously as possible," said Justice Department spokeswoman Gina Talamona.

Microsoft's reaction was cautious, too. "We've always said we're confident that this will be overturned on appeal, whether it was heard by the Supreme Court or the Court of Appeals," said spokesman Jim Cullinan.

A federal law allows major antitrust cases to skip the appeals court step and move straight from a trial court to the Supreme Court if the justices grant review. But Microsoft urged the justices not to do so, saying the case is too complicated.

The Justice Department countered that taking the case through the appeals court would delay a final ruling by at least a year, "irreparably" harming competition in a vital sector of the national economy.

(c) Copyright 2000. The Christian Science Publishing Society

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