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DoJ sticks to its guns, MS sentence looms

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MS on Trial The DoJ has stuck to its proposal to break Microsoft into two - an OS and an apps company - and to impose tough conduct remedies pending the breakup. The only changes in its Revised Proposed Final Judgement are a couple of relaxations and a few phrasing improvements. The filing follows closely the mood of Judge Jackson in court last week, and it's likely that he will agree to it.

In his Scheduling Order Number 8, on 5 April, he said he would like to complete the remedy hearings "within 60 days". Whether this means he intends to issue his judgement by next Friday, or whether he had built in possibility of delay in case Microsoft had requested it, for valid reason (such as a difficulty in deposing DoJ witnesses), and would take the necessary time thereafter to issue his ruling is not clear. There is some support for a decision next Friday in that the judge only gave 48 hours to each side, but that could just mean that he has another case, or is taking an early holiday.

The probability is that he will need some time for the likely accompanying memorandum that sets out the legal reasons for his decision, and to make it as appeal-proof as possible. On the other hand, this legal groundwork may have been done already. Microsoft is fortunate that because of the holiday on Monday this week it will have until Wednesday to file its last brief before judgement.

One relaxation is to allow Microsoft 90 days instead of 30 days before the Final Judgement would come into effect, on account of stays pending appeal. The other relaxation will please Microsoft co-founder Paul Allen: he is allowed to escape the provision built in to restrict Bill Gates and Steve Ballmer owning shares in both companies as the limit is raided from three per cent to five per cent (Allen, although diversifying furiously, still has around a four per cent folding). Curiously, it would appear possible for both Gates and Ballmer to hold shares in the same future company. The remaining changes are small clarifications and minor phrasing improvement of no great significance.

There is an accompanying Memorandum by the DoJ that is as vitriolic as legal documents get. Its thesis is that "Microsoft has not engaged responsibly" in following the rules set out by the court. The DoJ is particularly critical of the "Order of Proof" that Microsoft produced at "the eleventh hour", since only after the Court said that it was "not contemplating any further process (hearings)" did Microsoft produce what it had prepared but "kept secreted in its briefcases" - a 35-page document offering testimony from 16 different witnesses. Nobody seemed to see that the joke was that's why they're called brief cases.

Some might call this foresight on Microsoft's part, but to the DoJ it was evidence of bad faith, since "Microsoft was not genuinely surprised about what was expected of it" and "was perfectly capable of being forthright with the Court but chose not to do so".

It does appear that Microsoft may have given up trying in Judge Jackson's court, hoping for a better result on appeal. It clearly made a serious legal error in not seeking any depositions or discovery after the DoJ filed its original Proposed Final Judgement, and most seriously of all, not addressing the process issue at all. Microsoft had the right to depose the declarants that the DoJ had used, but did not choose to do so. The hawks amongst Microsoft's lawyers may live to regret that they had not been doves.

The DoJ said: "A party that was genuinely interested in having discovery or further proceedings would not have behaved that way. It would have made timely and specific requests for more process; it would have attempted to show good cause for a continuance; and, if it had evidence or even a bona fide offer of proof, it would have submitted it when process issues were discussed. It would not have waited until the conclusion of the hearing." ®

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