Don't break up Microsoft, said DoJ – MS counter attacks

No legal significance, but red faces all round

MS on Trial Microsoft has fingered an embarrassing episode in the DoJ's history - the time when the DoJ vigorously opposed a call for the break-up of Microsoft. In extraordinary circumstances, both Microsoft and the DoJ were once on the same side in 1994 opposing an amici memorandum submitted by lawyer Gary Reback of Wilson Sonsini on behalf of a number of unidentified clients (actually Apple, Sun, and Sybase, with informal support from Borland and Novell).

By coincidence, it was announced on Sunday that Reback is leaving Wilson Sonsini to form a start-up called Voxeo. A brief that Microsoft filed yesterday takes some highly-selected extracts from the 1994 consent decree case seriously out of context, and misrepresents the circumstances at the time while it's about it.

The DoJ had asked economist Kenneth Arrow to comment on the amici memorandum two days before a Tunney Act hearing into whether the consent decree was in the public interest. Arrow, who was only partially briefed because of the time constraints, did not disagree with the amici's analysis of the software industry, which turned out to be prophetic. To Microsoft's present delight, the DoJ then summarised Arrow's contribution as suggesting that breaking up Microsoft would not necessarily benefit competition and would "act against the public interest".

The DoJ also said, in a bit Microsoft left out of its filing, but which reflects badly on the DoJ's judgement at the time: "If this proposed Consent Decree is entered, [the amici] suggest Microsoft inevitably will engage in a litany of practices that will lead to its total domination of all corners of the software industry. They also seem to suggest that the entry of this proposed Consent Decree is the equivalent of granting Microsoft a license to violate the antitrust laws." Microsoft further omitted Arrow's opinion that Microsoft's use of per-processor licences had reached such a level that it "foreclose[d] competition" in the operating systems market.

The legal significance of this filing by Microsoft is minimal, because the DoJ will have the opportunity to bring out the relevant facts, but Microsoft's timing is impeccable since there is a hearing before Judge Jackson tomorrow and very little time for the DoJ to file a response. Dealing with it in court would waste time that could be better spent on the main thrust of the case. This filing is very much a propaganda exercise since there is no legal weight in the arguments, but it shows yet again that Microsoft has lost none of its flair for playing to the gallery of public opinion. ®