DoJ files, while MS plays double game on delays

They'll get seriously confused if they keep this up...

MS on Trial The euphoria yesterday that sent Microsoft's share price above $70 (but still seriously down from $130 in December) may be short-lived, as it resulted from Microsoft filing an appeal for a stay over the conduct remedies with the Court of Appeals. The DoJ filed a brief and cool Motion with the Court of Appeals asking that Microsoft's stay Motion be dismissed - or failing that, its consideration should be deferred.

It became very clear that Microsoft had tried to be too clever in its desire to get the appeal heard by the Court of Appeals, and that the Court's breathless confirmation that the case was "of exceptional importance" was all but an instruction to Judge Jackson to kick the case upstairs to the Supremes. The reason for this is that the Expediting Act says that "an appeal from a final judgment... shall lie directly to the Supreme Court, if... the district judge who adjudicated the case enters an order stating that immediate consideration of the appeal by the Supreme Court is of general public importance in the administration of justice".

Microsoft yesterday filed a brief brief with Judge Jackson suggesting that the appropriate procedure should be for Microsoft to file its response to the DoJ's motion asking for the case to be sent to the Supremes. It was ironic that in the Court of Appeals Microsoft had been complaining that it was urgent that it stay the case because the clock was ticking before enforcement; but at the same time in the District Court Microsoft was dragging its feet while pretending to be cooperative, by offering to file the response within four business days, rather than in eleven calendar days to which it said it was entitled. ted a timetable to give Microsoft a maximum reasonable time to respond.

For Judge Jackson, it was a case of "no appeal, no denial of the stay", so Microsoft finally did file a minimal formal notice of appeal, but because of Microsoft's notice that it will not file its objections to the case going to the Supremes until Monday, he is prevented from deciding on this until after that brief is filed. The DoJ was able to point out these shenanigans in its brief to the Court of Appeals, and draw formal attention to Microsoft's breaking of the Federal Rules of Appellate Procedure, since "a party seeking a stay pending appeal must ordinarily move first in the district court'". The DoJ pointed out as gently as it could to the Court of Appeals that once the case is certified - early next week - the Court would lack jurisdiction.

The interesting part of all this is to speculate as to why Microsoft is playing this funny game. The only explanation that makes any sense is that Microsoft wants to gain more time for lobbying, briefing and grass-roots support of its campaign over the weekend. It is known that its PR firms have been working flat out to persuade anybody who has previously been sympathetic to Microsoft's cause to get active. This has already accounted for a number of sympathetic stories.

Richard Epstein, a libertarian lawyer from the University of Chicago writing in the WSJ, attributed Microsoft's woes to the downturn of its competitors, which was a novel if inaccurate view. His argument that a chance should not be taken splitting Microsoft because "it is unclear whether the productive juices within Microsoft could survive the split up" is a curious reason for not righting wrongs. He also thinks that Microsoft "has a strong incentive to charge monopoly prices for its innovations" but ignores the fact that the conduct remedies would prevent monopolisation and make it possible for competition to thrive. Epstein is unaware that Linux runs on Intel-based computers, but what do lawyers know? Epstein concludes that Judge Jackson should not be "taking it out on those of us who have benefited from its success".

Boyden Gray, a lawyer whose firm represented the Association for Competitive Technologies (euphemistically described as "a Microsoft-supported trade association") had an article in the WSJ in which he suggested that "breakup was never on the table" during the mediation effort with Judge Posner, and suggested that the DoJ would not accept just conduct remedies. Gray suggested that the court had found that Microsoft violated the law in four ways: "spending too much on developing and improving Internet Explorer; taking too few profits; subjecting its own Internet service provider (MSN) to too much competition... and spending too much on promotion". Ahem. ®

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