U.S.

Microsoft's Not Done Yet

By CBSNews.com staff CBSNews.com staff

April 3, 2000 / 10:19 PM EDT / CBS

Microsoft got its expected bad news Monday, when a federal judge confirmed what everyone had suspected since he issued his factual findings last November. In the eyes of Judge Thomas Penfield Jackson at least, Microsoft is a harmful monopoly which violated federal anti-trust laws and perhaps state anti-competition laws as well.

But the big news in this case is still many months away. The big news will come after the judge hears arguments and proposals during the remedies phase of the trial and then declares what ought to happen to the software giant as a result of its apparently illegal conduct. Those remedies, more than the judge's factual findings or his stinging legal conclusions Monday, will dictate whether all sides make a deal here or whether the gulf between Microsoft and the government is so vast that it takes years and years of appeals to resolve. And of course those remedies will dictate what Microsoft looks and acts like as it moves further into the 21st Century.

Amid the focus on Microsoft's apparent violation of federal anti-trust laws, meanwhile, it's worth remembering that Judge Jackson agreed with the state litigants on 23 of their 26 arguments. That's an astounding ratio and it suggests that, on top of the huge federal headache Microsoft no doubt now has, the company also has to worry about state anti-competition lawsuits, which surely will be bolstered by the judge's factual findings.

Legal Analyst Andrew Cohen

In other words, those states which sold the judge on those arguments can now use, in some way or another, Monday's ruling to help convince some state judge or jury that Microsoft ought to be punished at a state level. I suppose that if any part of Monday's ruling was a surprise, the extent to which the federal judge bought into the state arguments is it.

So what happens next? The parties no doubt are digesting the ruling even as you are reading this. The lawyers for all sides are pouring over the document to evaluate the cases cited by the judge, the way those cases were cited, and the language the judge used in reaching his legal conclusions. This analysis, and it will take months for it to be complete, will dictate in many ways which remedy proposals the attorneys for both sides are likely to make to Judge Jackson.

The judge will hear those proposals, and arguments, and perhaps even from expert witnesses during the remedies phase of the trial, which probably will take place months from now and then he'll issue his remedies, which likely won't be released until months after that. Many computer experts—and I certainly don't count myself as one of those—feel that those remedies could range anywhere from a break-up of Microsoft (not likely, in my opinion) t a significant change in the way the company is permitted to operate (more likely, I'll bet).

If no settlement is reached, the appeals process will begin, first to a three-judge panel, then probably to a full appeals-court panel, and then perhaps even to the Supreme Court. That, as you probably can tell, could take years and years to resolve even if Microsoft is sincere about its pledge to ask for an expedited review of Judge Jackson's work.