A federal appeals court this week is expected to savage the Justice Department’s efforts to break up Microsoft Corp. in a move that could allow Bill Gates to once again dominate the software industry.
Lawyers close to the case and industry officials are expecting judges on the U.S. Court of Appeals, who strongly criticized rulings and the conduct of trial judge Thomas P. Jackson at a hearing in February, to overturn portions of the government’s landmark antitrust case against the software behemoth.
It is widely anticipated that, possibly as early as Tuesday, the epic case will be sent back to the lower courts with instructions that the Justice Department’s plan to break Microsoft into two companies be scrapped in favor of a less severe punishment.
Although New York and 18 other states that sued Microsoft along with the Justice Department have vowed to press ahead with the breakup before the Supreme Court, officials close to the case say the anticipated Appeals Court decision could trigger a move by the Bush administration to reopen settlement talks with Microsoft lawyers.
The administration is considered to be far less hostile to Microsoft than was the Clinton administration.
President Bush said during the campaign that he would oppose “any settlement that would ruin this company because this company has been a very interesting innovator.”
The developments have clearly put Gates, the richest man in the world, in much better spirits.
A year ago – after Jackson ruled that the company violated antitrust laws by using its Windows computer operating-system monopoly to decimate competition – Gates was edgy, nervous and very much on the defensive.
He was widely ridiculed for his bizarre and evasive videotaped testimony in the case.
But it was a tanned, relaxed and even playful Gates who showed up last week at Manhattan’s Hammerstein Ballroom to roll out Microsoft’s newest product, Office XP.
With Microsoft stock rising again and the company building up $30 billion in cash reserves, Gates hammed it up with Amazon boss Jeff Bezos and was bursting with optimism about the new “digital decade” – with Microsoft at the helm.
Later this year, Microsoft plans to introduce its biggest new product since Windows 95. It’s Windows XP, a new operating system for personal computers that will harness the full might of Microsoft onto one computer screen, linking users to Microsoft’s Windows Media Player, the Microsoft Network Web portal, and Microsoft’s e-mail and instant-messaging service.
This year, Microsoft also plans to introduce Stinger, a new operating system for cell phones, and Xbox, a game console.
The company says this represents the biggest and boldest introduction of new products in its 25-year history.
“If you look at the total panoply of products, they add up to a very similar anti-competitive thrust that landed them in Judge Jackson’s court in the first place,” said an executive of a leading Microsoft rival.
Only this time around, he noted, it is likely government trust-busters will not be nipping at Bill Gates’ heels.