Following the US Appeals Court ruling that overturned a lower court
order to break the company in two, Microsoft chairman and chief
software architect Bill Gates said that Microsoft will continue
with its aggressive new initiatives in the computer and Internet
markets, and will work to conclude its current legal battle
"without the need for continued litigation".
"We're still reviewing the details of the ruling but it's clear
that it reverses and significantly narrows the district court
decision," Gates said. "It lifts the cloud of break-up over the
company - we do not believe a break-up will take place."
Gates focused on the company's plans for continued innovation and
the release of several new products this year. "There's nothing in
today's rulings that changed our plans for future products,
including Windows XP," he said.
Over the past three years and despite the continuing legal
proceedings, the company built its Windows 2000 operating system,
launched its .Net strategy, and released Office XP, the newest
version of its desktop software suite. It is planning to launch its
newest operating system, Windows XP, on 25 October, followed by its
video game console XBox and the Tablet PC.
"That's completely on track," Gates said. "Microsoft as an entity
is moving ahead."
The US Appeals Court for the district of Columbia issued a ruling
yesterday that overturned Judge Thomas Penfield Jackson's order
that Microsoft be split into two, but said that Microsoft illegally
maintained its Windows monopoly.
"Of the three anti-trust violations originally identified by the
District Court, one is no longer viable: attempted monopolisation
of the browser market," the Appeals Court wrote in its 125-page
ruling. "One will be remanded for liability proceedings under a
different legal standard: unlawful tying," the document continued.
"Only liability for the monopoly-maintenance violation has been
affirmed - and even that we have revised."
Those liability issues directly link to the Appeals Court's
decision to toss out the remedies. The court further cited judicial
misconduct as a reason to seek a reconsideration of remedies.
The panel of seven appellate judges generally agreed with the lower
court ruling that Microsoft used its monopoly power to engage in
anti-competitive behaviour. However, the court sharply criticised
Jackson for not holding an evidentiary hearing in the case and for
his actions in the media. The court wrote in its ruling "that the
actions of the trial judge seriously tainted the proceedings" by
discussing the case with the press outside of the courtroom, "and
called into question the integrity of the judicial process."
Microsoft officials did not comment on the court's rulings on
Jackson.
The Appeals Court did agree that Microsoft wielded its monopoly
power illegally, and ordered that the case be sent back to the
lower court to determine once again what remedies should be applied
to curb Microsoft's behaviour. It isn't illegal to be a monopoly;
but it is illegal to use monopoly power in an anti-competitive way.
The Appeals Court also ordered that the case be heard by a
different judge to decide what penalty Microsoft will face.
David Smith, an analyst for Gartner, said the appeals court ruling
was a "solid double, not a home run for either side." But it did
bring with it an important confirmation: that Microsoft is a
monopoly. "That's something they really don't want to have on their
record," he said.
Microsoft and the Department of Justice can appeal all or parts of
the appeals court verdict with the Supreme Court. A separate case
regarding unlawful tying could also be pursued, though Microsoft
argued it would be difficult for the prosecution to make a case for
that. The company said it would also consider settling out of
court.
"We will be reviewing the ruling and determining what actions we
need to take," Gates said.
Gates did acknowledge that Microsoft has become a large and
influential player in the technology industry. "We take that
responsibility very seriously," he said.