Microsoft Appeal Blasts Judge Government Claims Rejection Of Antitrust Deal Invites ‘Anarchy’

The Justice Department on Tuesday sharply criticized a federal judge’s rejection of an antitrust settlement with software giant Microsoft Corp., saying the judge’s reasoning was “an invitation to anarchy in the enforcement of antitrust laws.”

Assistant Attorney General Anne K. Bingaman, in a brief filed in the U.S. Court of Appeals, said U.S. District Judge Stanley Sporkin “vastly exceeded” his authority under federal law when he rejected the government’s pact with Microsoft on Feb. 14.

Bingaman said Sporkin’s decision “threatened substantial damage to the public interest in effective antitrust enforcement …”

She said Sporkin overstepped his review under the Tunney Act, which the Justice Department argues permits for a limited judicial review of the agreement’s terms, not “a sweeping judicial investigation of Microsoft.”

Sporkin said the Microsoft-Justice agreement wasn’t in the public interest.

In the agreement, Microsoft promised to stop sales incentives to personal computer makers for its MS-DOS and Windows operating software.

The incentives were tied to each computer sold by the manufacturer rather than each machine that actually contained the software. Microsoft had offered the best prices to companies that adhered to such terms.

Microsoft’s practice made it less likely that a manufacturer would use another company’s operating system, such as Novell Inc.’s DR-DOS or IBM’s OS-2. That’s because the manufacturer would have to pay for both Microsoft’s software as well as the other program.

Bingaman said the Justice Department concluded “that Microsoft was engaging in particular unlawful practices that diminished the prospects for innovation and competition.”

“It negotiated a decree providing for complete and prompt termination of those practices,” she wrote, adding that “the government’s antitrust program will be gravely damaged” if the agreement isn’t reinstated by the appellate court.