Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 17, 1995 TAG: 9502210008
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: The Boston Globe
DATELINE: WASHINGTON LENGTH: Medium
``We negotiated a settlement that remedied the illegal practices ...and any conclusion by the judge to the contrary is, we suggest, incorrect,'' said Attorney General Janet Reno.
In the motion for appeal filed Thursday, Justice Department lawyers argued that federal Judge Stanley Sporkin ``misconstrued the permissible scope of his review'' when he refused to approve the settlement, which ended nearly four years of federal investigation of alleged anticompetitive behavior by Microsoft.
Sporkin ruled Tuesday that the settlement did not force the Redmond, Wash.-based company to abandon enough of its ``anticompetitive practices'' and so did not sufficiently protect consumers.
By challenging the unprecedented ruling, the Justice Department is trying to protect both the complicated deal it hammered out with the software giant and the broader prerogative of prosecutors to shape investigations and strike deals with businesses suspected of breaking antitrust laws.
``This is a huge threat,'' Anne Bingaman, head of the Justice Department's antitrust division, said of Sporkin's ruling. ``It is an invitation to any judge who wants to take it to review any kind of conduct, regardless of whether it is related to the complaint."
Both Microsoft and its critics seized the opportunity to cock their guns in what is shaping up to be one of the biggest showdowns in antitrust history. No sooner had Microsoft announced it was joining the appeal in support of the Justice Department than a major computer industry group filed notice that it, too, would submit testimony to the court.
``We have just indicated to the court our intention to respond to the appeal,'' said Ed Black, president of the Washington, D.C.-based Computer and Communications Industry Association.
Parties that are deemed to have a direct interest in a case are generally permitted to submit arguments in amicus, or ``as friends'' of the court.
Microsoft finds itself in a tricky situation.
While it fought hard to avoid submitting to the settlement, the company now finds itself backing the government's bid to preserve it. The company apparently does not want to risk reopening the case; that could lead to restrictions that are tougher than those contained in the accord.
Meantime, Microsoft has incentive not to anger antitrust prosecutors. It is counting on the department to approve its merger with Intuit Inc., considered key to Microsoft's plans to move into the on-line services market.
Microsoft's stock closed up 1/8 at 607/8 in heavy Nasdaq trading.
The Justice Department's appeal prompted incredulity among some critics. ``We are stunned and shocked,'' said Gary Reback, a Palo Alto lawyer for three anonymous Microsoft competitors. ``Someone needs to explain why the Department of Justice is treating Microsoft like a client and not an adversary.''
Under the Tunney Act, approved by Congress in 1974, judges have the right to review antitrust settlements to determine if they are ``in the public interest.'' But in practice most judges merely rubber stamp the deals negotiated between prosecutors and the targets of their investigations.
In its seven-page request for an appeal, the Justice Department accused Sporkin of ``impermissibly measuring the proposed [settlement] against his own vision of an ideal decree,'' and asked the Circuit Court of Appeals in Washington to move quickly to avoid ``immediate and irredeemable harm'' to the antitrust division's enforcement program.
The antitrust division maintains that the Tunney Act does not give judges the right to second-guess government investigations.
by CNB