http://www.wired.com/news/politics/0,1283,32131,00.html Judge Lowers Boom on MS by Declan McCullagh 5:35 p.m. 5.Nov.1999 PST The US judge overseeing the Microsoft antitrust trial didn't only rule that the company has erected a far-reaching monopoly. He also took the first step toward extreme punishments that could include breaking up the largest software company in the world. In a detailed, 207-page ruling, US Judge Thomas Penfield Jackson rejected nearly every one of Microsoft's explanations and repeatedly sided with arguments that the Justice Department and state attorneys general raised during the trial that began in October 1998. Jackson painstakingly detailed that there were no viable competitors to Windows, dismissing the MacOS, Be/OS, Java, network computers, and handheld devices as technologies certain to "remain small in comparison." He also indicated that he viewed Microsoft as such an industry bully that he'd be open to extreme remedies. "Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products," Jackson wrote. Emboldened competitors immediately seized the opportunity to call for strict remedies, which will be decided in the next phase of the trial that continues through early 2000. Sun Microsystems, which testified as a government witness, said Microsoft should not be allowed to buy companies that would expand its reach into new technologies, and the company should be required to publish key private technical details about its products. Bill Campbell, chairman and acting CEO of Intuit, said in a statement that "nothing short of a lasting structural remedy will suffice." Translation: Break up the company, something that other Microsoft adversaries are now talking more openly about. "Microsoft's failure to deal with parties in good faith suggests the court may entertain structural remedies such as breaking Microsoft into more than one company," said Jamie Love, director of Ralph Nader's Consumer Project on Technology. But although Jackson's passionate embrace of the Justice Department's view of Microsoft's malfeasance is a good indicator of where he stands, Microsoft's adversaries will likely have a long time to wait. Jackson probably won't reach a final verdict until next year, and the Supreme Court may not rule until 2003 on whether Microsoft really did violate antitrust laws after all. William Neukom, Microsoft's general counsel, told Wired News earlier this year he expected a ruling from Jackson around January 2000. "I think it's going to be later this year or early next year," Neukom said. In the next phase, parties will have until 31 January 2000 to finish their proposed "conclusions of law," which Jackson will review before making a decision. If both parties don't settle and the case heads for the Supreme Court, the assumption is that the court will agree to hear the case. Experts say that's particularly likely if the government loses. Once the case reaches the high court, and if the justices decide to take it, add an additional delay of 1.5-2 years. Knotty cases are usually decided toward the end of the court's term, which means the Supreme Court might well rule on it in late June 2002 or 2003. ---------------------------------------------------------------------------- http://www.wired.com/news/politics/0,1283,32377,00.html Judge: 'Gates Was Main Culprit' by Declan McCullagh 3:00 a.m. 6.Nov.1999 PST Bill Gates was directly involved in strong-arming companies into kowtowing to Microsoft's demands, according to US District Judge Thomas Penfield Jackson. Jackson's 207-page condemnation of Microsoft released late Friday reads like a litany of precisely the same offenses the company's enemies have spent years complaining about -- and spent much of the trial accusing the world's richest antitrust defendant of masterminding. During the trial, which began in October 1998, government attorneys took pains to personalize the lawsuit by singling out Gates as someone who was personally involved in many dodgy activities. One attorney even said the Microsoft chairman didn't have the "intestinal fortitude" to show up and testify in person. The judge seems to have agreed that Gates was a key figure. Gates' name appears on 67 separate lines of the findings of fact document. Microsoft has repeatedly -- and forcefully -- characterized Gates' involvement in day-to-day decisions as peripheral and has denied violating antitrust laws. Jackson is expected to issue a verdict in 2000. Gates told reporters who gathered in the Microsoft Studios in Redmond Friday that "Microsoft is committed to resolving this case in a fair and responsible manner, while ensuring that the principles of consumer benefit and innovation are protected." In alleged pressure tactic after pressure tactic, Jackson characterizes Gates as personally involved, often interacting with other CEOs to extract concessions for Microsoft. Some excerpts from the court document: * "With the encouragement and support of Gates, a group of Microsoft executives commenced a campaign in the summer of 1995 to convince Netscape to halt its development of platform-level browsing technologies for Windows 95." * "In the first week of July, Gates himself met with Intel's CEO, Andrew Grove [and tried] generally to reduce the number of people working on software at Intel.... Faced with Gates' threat, Intel agreed to stop developing platform-level interfaces that might draw support away from interfaces exposed by Windows." * "Microsoft did not intend to capitulate. In July, Gates called an executive at the IBM PC Company to berate him about IBM's public statements denigrating Windows. Just a few days later, Microsoft began to retaliate in earnest against the IBM PC Company." "When Gates became aware of what [original equipment manufacturers] were doing, he expressed concern.... In an effort to thwart the practice of OEM customization, Microsoft began, in the spring of 1996, to force OEMs to accept a series of restrictions on their ability to reconfigure the Windows 95 desktop and boot sequence." * "Gates expressed frustration that [AOL CEO Steve] Case continued to insist on getting an AOL icon on the Windows desktop in addition to the technology, engineering assistance, and technical support Microsoft was offering AOL. Despite the obvious importance that Case attached to desktop placement, Gates said he would not agree to that condition." It's not surprising that Jackson sides with the government's nefarious view of Gates as online robber baron, rather than Microsoft's characterization of him as an executive involved in normal hard-nosed business relationships. After all, on every point that matters, Jackson has agreed with the Justice Department and the state attorneys general. His factual findings in this case are so anti-Microsoft that it's difficult to overemphasize how badly the company has lost the first round.