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But MS is hardly in the clear

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If there's anyone to whom Microsoft owes a huge debt of gratitude today it would have to be District Judge Thomas Penfield Jackson, whose behavior behind the bench so appalled his peers on the appellate circuit that they've seen fit to vacate his rulings and disqualify him from further involvement in United States v. Microsoft.

Thus the DC Court of Appeals ruled Thursday that Jackson "seriously tainted the proceedings," with "public comments [which] were not only improper, but also would lead a reasonable, informed observer to question [his] impartiality."

In other words, it probably wasn't the brightest idea in the world for Jackson to have granted interviews to reporters in which he compared the company to a drug gang and Bill Gates to Napoleon Bonaparte while the trial was still going on.

Of course there's more to it than media grandstanding, as the appellate court notes. Jackson showed bias when, after receiving the DoJ's suggested remedies, he denied Microsoft an evidentiary hearing and went straight for his rubber stamp.

"The District Court rejected Microsoft's request for further evidentiary proceedings and, following a single hearing on the merits of the remedy question, issued its Final Judgment," the appellate ruling notes.

Thus the court reversed Jackson's finding that MS monopolized the browser market, but remanded back to the district court his finding that MS broke the law by bundling the browser with Windows, and affirmed his finding that MS used anti-competitive means to protect its rather obvious operating-system monopoly.

In any case Judge Jackson will be warming the sidelines bench this time, rather than sitting behind the big one.

Not out of the woods

The ruling is a gross humiliation for Judge Jackson, and one no doubt delightful to Redmond; but it's far from a sweeping victory for Microsoft, in spite of corporate sound-bites to the contrary.

The appellate ruling "lifts the cloud of breakup over the company," Chairman Bill Gates gushed to reporters only hours after the decision was announced.

Not so fast, Bill. The appeals court found considerable rubbish in Microsoft's defense arguments, all of which needs to be sorted back on the district circuit.

If MS is no browser monopolist, it certainly is an OS monopolist; and its arguments to the contrary are bogus, the court notes. For example, in denying its OS monopoly MS pointed at Apple as a thriving competitor distinguished solely by its dependence on a different CPU.

Utter bollocks says the court: "Microsoft's argument that Mac OS should have been included in the relevant market suffers from a flaw that infects many of the company's monopoly power claims: the company fails to challenge the District Court's factual findings, or to argue that these findings do not support the court's conclusions."

"The District Court found that consumers would not switch from Windows to Mac OS in response to a substantial price increase because of the costs of acquiring the new hardware needed to run Mac OS (an Apple computer and peripherals) and compatible software applications, as well as because of the effort involved in learning the new system and transferring files to its format."

"Microsoft responds only by saying: 'the district court's market definition is so narrow that it excludes Apple's Mac OS, which has competed with Windows for years, simply because the Mac OS runs on a different microprocessor.' This general, conclusory statement falls far short of what is required to challenge findings as clearly erroneous."

Which is a polite way of saying, 'if there's anything more insulting than being lied to, it's being lied to poorly.'

The court also dismissed out of hand Microsoft's effort to include non-PC devices such as handhelds in its list of purported Windows competitors, and scoffs at its claim that middleware (e.g., Java) helps keep its OS monopoly in check by possessing the "potential" to ape OS functions and thereby exert downward pressure on the price of Windows.

So if Microsoft is going to walk away unscathed in district court, it's going to have to prove what it says about that thriving OS market out there; and we reckon it can't prove what simply isn't true, try though it will. ®

Related Link

The ruling in full (.PDF)

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