MS trial: what the DoJ is likely to demand

Later today the DoJ will offer its views on Findings of Law

MS on Trial Later today the DoJ will file the first of two briefs allowed for under the timetable established by Judge Jackson, but there will be no mention of proposed remedies since the judge has ordered that the briefs address only proposed findings of law. It is likely that the DoJ will press for a Sherman Act section two finding, which prohibits monopolisation, attempted monopolisation, and conspiracy to monopolise any market for a particular service or product (more generally described as attempted monopolisation or monopoly maintenance). If there is a specific intent to monopolise; anti-competitive or predatory conduct directed to accomplishing the unlawful purpose; or a dangerous probability of success; then there may have been an unlawful attempt at monopoly. Abusive practices to gain or keep a monopoly in a relevant market are also prohibited. In fact two section two charges are likely: one for operating system monopolisation, and the other for the monopolisation of the browser market. However, it is less certain that Judge Jackson would sustain the latter argument as the browser market share has not yet reached the point of being a legal monopoly, according to the evidence presented. A further possibility is a request for a finding that Microsoft has transgressed the Clayton Act, which extends the Sherman Act and prohibits tying arrangements in which the purchase of one item is tied to or packaged with the purchase of another. Also prohibited under this Act are exclusive dealing arrangements in which the seller makes the buyer agree not to sell products from the seller's competitors, especially in view of IBM's evidence. Dow Jones today is quoting an unnamed Microsoft spokesman as spinning that there is insufficient evidence for either a section one or two finding, because the judge's Findings did not support any such claims. Quotations are then taken out of context in the Dow Jones story, with generalisation from a particular. The report relies on the last sentence of paragraph 336, in a section dealing with "Inducing ICPs to enhance Internet Explorer's usage share at Navigator's expense", and ignores the earlier part. The paragraph reads in full: "336. It appears that, at the time the obligation expired, Microsoft had not yet begun to enforce its requirement that the Top Tier, Platinum, and IEAK ICPs develop content that would appear more attractive when viewed with Internet Explorer than when viewed with Navigator. Moreover, there is no evidence that any ICP other than Disney developed any "differentiated content" in response to its agreement with Microsoft. Therefore, there is insufficient evidence to find that the requirements that Microsoft sought to impose with respect to the use of Microsoft-specific browsing technologies had any discernible, deleterious impact on Navigator's usage share." Likewise, in a section dealing with "The success of Microsoft's effort to protect the applications barrier to entry from the threat posed by Navigator", the claim is made that AOL's acquisition of Netscape "makes it less likely Microsoft will succeed in monopolising Internet browsers" and cites the first sentence of paragraph 384 (before going on to confuse Microsoft's desire to stop the migration of applications from Windows to the Web with a different conclusion in the second sentence of the paragraph): "384. Although the suspicion lingers, the evidence is insufficient to find that Microsoft's ambition is a future in which most or all of the content available on the Web would be accessible only through its own browsing software. The evidence does, however, reveal an intent to ensure that if and when full-featured, server-based applications begin appearing in large numbers on the Web, the number of them relying solely on middleware APIs (such as those exposed by Navigator) will be too few to attenuate the applications barrier to entry." It has been determined from case law that a monopoly can certainly exist when the market share is 70 per cent. Judge Jackson determined in paragraph 373 that "The most reasonable prediction, then, is that by January 2001, Internet Explorer's usage share will exceed sixty percent while Navigator's share will have fallen below forty percent," hence the doubt about a claim for a browser monopoly finding from the evidence presented. There is also a strong possibility that the DoJ will press for a Sherman Act section one finding, that prohibits "contract, combinations or conspiracies" that restrain trade, and anti-competitive agreements such as price-fixing and tying" (more generally called business practice transgressions). Microsoft has the problem that because it has been found judicially to be a monopoly, then exclusive contracts to help maintain that monopoly are illegal. Microsoft must respond by 17 January, and then there is a week for the DoJ to comment and another week for Microsoft to comment . The judge specifically ordered that the parties must not address the subject of remedies, if warranted. Meanwhile, the pas de deux will continue in Chicago, with nobody expecting a successful mediation at the moment. ® Complete Register Trial coverage

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