A Great Big Trial In A Great Big Hurry

U.S. vs. Microsoft will sail by--and the company isn't happy

There's always a frenzy before lawyers go to trial. But with only days to go before Judge Thomas Penfield Jackson was scheduled to call for opening statements in U.S. vs. Microsoft, lawyers at Microsoft Corp. headquarters in Redmond, Wash., and in the bowels of the Justice Dept. were setting new records for pretrial jamming. That's no surprise to legal experts. "There is nothing normal about (this case)," says Stephen M. Axxin, an antitrust litigator at New York's Axxin, Veltrop & Harkrider.

No, indeed. Judge Jackson has made sure of that. The moment he got the case in May, he told both sides he was determined to streamline the proceedings. They would have five months to gather evidence and be allowed just 12 witnesses each. "Full-line monopolization cases are usually measured in years, not months," notes Axxin. If all goes according to Jackson's plan, this one should wrap up in six to eight weeks--less time than it takes to whip up a new web browser.

And that's the point. The first major antitrust trial of the Internet Age will be tried on Internet time. Why? So that when a decision is finally handed down, there may be hope that it will have some relevance in the quickly changing industry. That would be the reverse of the last great information-technology case, U.S. vs. IBM. It was filed in 1969 and dismissed in 1982--by which time most of the issues were moot and IBM had gone from the unquestioned leader to a giant under assault by smaller companies.

That just won't do these days, when Internet years are counted like dog years. With each passing week, millions of copies of Windows 98 will be sold, each with technology--Microsoft's Internet Explorer browser and its variation of Sun Microsystems Inc.'s Java--that, Justice claims, is being marketed in a way that squelches rivals. For example, as Microsoft has tied its Explorer browser more intimately to Windows, Netscape Communications Corp. has seen its browser share drop off. "There's a limited window of opportunity for these products to take off and succeed," says Carl B. Shapiro, a professor of economics at the University of California at Berkeley. "If that window closes, antitrust has failed to do its job."

But the expediency of the case comes at a cost--and Microsoft argues that cost is justice. The company says that the tight schedule leaves its lawyers little time to prepare a defense, especially since the government was still introducing new evidence just 11 days before the trial was scheduled to start. On Oct. 8, Justice added two new witnesses--an Apple Computer Inc. executive and a Sun executive--who will testify in place of an economist and a customer.

"POP QUIZ." Microsoft sought a two-week postponement, but on Oct. 13, Jackson denied the request--as he has denied its previous requests for more time. "Apparently the government thinks a federal antitrust case should be a pop quiz rather than a careful examination of the issues," gripes Mark Murray, a spokesperson for Microsoft.

Even some Microsoft critics are sympathetic. Says Samuel Miller, a San Francisco lawyer who played a key role in Justice's 1994 probe of Microsoft: The defendant is "always scrambling to keep up with what the plaintiff is doing."

Government lawyers, however, suggest Microsoft is just stalling, and that it has had plenty of warning about what is coming, particularly in the case of Sun which has been fighting Microsoft in civil court. And in recent weeks Microsoft in fact has embarked on its own new fact-finding mission, subpoenaing new evidence from competitors as well as from the authors of a book about Netscape--an effort that ended when a Boston judge ruled that Microsoft would not be permitted to subpoena confidential notes.

The fast pace doesn't help the Feds, either. Most experts agree that the government's broad-based case will be hard to pull off. "There is a chance that their case will look superficial," says William E. Kovacic, a professor of antitrust law at George Washington University.

Indeed, Jackson must strike a delicate balance between justice and speed, since the verdict could have a far-reaching impact on the evolving Net software market. "The danger here is that by proceeding too rapidly, the trial could set a precedent for industry regulation that stifles innovation and ultimately damages the economy," says Roger McNamee, president of Integral Partners, a Silicon Valley venture-capital firm.

Of course, that's exactly what Justice claims is the result of Microsoft's alleged monopoly. So, the government is betting big here. Under the legal principle of res judicata, Justice will basically be barred from ever attacking Microsoft on the same facts again. "This is their one bite at the apple," says Kovacic. So the case better have teeth.

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