Microsoft Judge for quick action, immediate appeal

quot;My transcendent objective is to get this thing before an appellate tribunal 8212; one or another 8212; as quickly as possible because I don8217;t want to disrupt the economy or waste any more of your or my time on a remedyquot; if the case is going to be returned on appeal.

Ultimately, the judge instead decided to push the two sides to agree to decide quickly on remedy recommendations in an extraordinary 60-day proceeding. He also startled both sides by proposing that the final offers during settlement negotiations that were abandoned Saturday be made a part of the court record to help define the remedy effort.

While the sides couldn8217;t agree on a settlement during the mediation, when it was abandoned this weekend both were proposing restrictions on Microsoft8217;s conduct 8212; not a breakup.

As if to punctuate Judge Jackson8217;s concerns about the effect of the case, his ruling against the company Monday reverberated in the stock market Tuesday, driving Microsoft shares down 2.3125 to 88.5625, extending Monday8217;s 14 drop.

Uncertainty over the company8217;s future also came amid a wild day of trading that saw both the Nasdaq Composite Index and the Dow Jones Industrial Average fall more than 500 points during the day, before both indexes recovered to show moderate declines at the close.

As the case was moved to a fast track, Microsoft Chairman Bill Gates arrived here Tuesday night and was scheduled to appear at a White House conference Wednesday with President Clinton and Federal Reserve Chairman Alan Greenspan, among others, in a discussion on how technology is transforming the world economy. The conference includes sessions on the Internet and productivity.

White House officials brushed aside any suggestion that Gates8217;s appearance may be awkward or even improper so soon after the verdict. A Microsoft spokesman said Gates will address broad issues of technology and the economy and won8217;t touch on antitrust policy in his discussions with Clinton.

Gates also plans to meet privately with Democratic and Republican congressional leaders. One House aide said Gates is expected to talk about and take questions on a number of legislative issues of importance to Microsoft, including Internet taxation, encryption, copyright, trade and antitrust enforcement.

The remedy proceedings proposed by Judge Jackson, while still being developed, are likely to include briefs by both sides and written testimony by witnesses, possibly followed by cross-examination in court, the same procedure used during the trial.

Judge Jackson also said he wanted as much as possible to release all of the proceedings publicly because of the extraordinary interest in the case and the quot;misinformation and leakage that has occurredquot; during the mediation effort, quot;despite everyone8217;s expressed intention to maintain strict confidentiality.quot;

The judge8217;s proposal to make public the final settlement offers wasn8217;t well received by either side; all of the parties had been ensured that the settlement effort would remain confidential under the rules of the Seventh Circuit in Chicago, where the mediation took place under the chief judge, Richard Posner.

Microsoft8217;s lawyer, John Warden, cautioned that disclosing the confidential offers would causethem to be quot;picked apart ad nauseumquot; by the public. So, in the face of objections by both sides, Judge Jackson relented and suggested the offers might be admitted under court seal.

In the meeting, Judge Jackson also warned an attorney general representing the states, Kevin O8217;Connor of Wisconsin, that he wanted all the plaintiffs to work together on a proposed remedy and that he would not be pleased if the two sides can8217;t agree. O8217;Connor assured the judge that they had worked out their differences, which Microsoft had said interfered with the mediation effort.

After the meeting, both sides prepared to begin work on proposed remedies to address the anticompetitive conduct raised in the judge8217;s ruling. He found that Microsoft illegally shielded its Windows monopoly from competition and tried to monopolize the market for Internet software as well.

A Justice Department official declined to comment on its approach to a remedy. Joel Klein, the department8217;s anti-trust chief, said Monday that no decisions had been made, but also didn8217;t rule anything out.

In the settlement talks, the government had said it would accept limits on Microsoft8217;s conduct short of a breakup if they were effective and enforceable. But having failed to get immediate restrictions through a settlement, the government will likely take a tougher stance before Judge Jackson.

The judge8217;s idea of seeking a direct review of the case by the Supreme Court is allowed under an obscure section of the antitrust laws that allows district-court judges to certify cases of great public importance for immediate review by the high court, bypassing the appeals court.

In his ruling Monday, Judge Jackson seemed to be inviting review by the Supreme Court by repudiating a 1998 appeals-court ruling reversing his order in an earlier stage of the Microsoft case.

The June 1998 appeals-court panel had warned courts away from getting involved in product-design decisions in high-technology industries. If Microsoft wanted to integrate Internet software into the Windows operating system, even if it hurt a competitor, it should be free to do so if there were quot;plausiblequot; benefits, the court said.

But Judge Jackson criticized this quot;undemanding testquot; as inconsistent with Supreme Court precedents and quot;only views the market from the defendant8217;s perspective 8230; or as the defendant would like to have the market viewed.quot; This approach quot;ignores reality,quot; and dispenses with any balancing of any claimed advantages against any anti-competitive effect, Judge Jackson said.

The judge8217;s conference Tuesday left a number of issues unsettled. In working out the timing of a meeting to resolve these issues, Judge Jackson tried to accommodate individual scheduling conflicts. quot;When do the Yankees open?quot; he asked.