18-Jul-01 - Microsoft today asked the Court of Appeals to re-hear that part
of their anti-trust appeal dealing with commingling of code between Windows 98
and Internet Explorer.
Legal experts say the court is unlikely to agree to re-hear any of the
appeal due to the way the case was conducted. Normal procedure is for three
judges to hear the appeal, and if a request to re-hear all or part of the
case is accepted all 7 judges participate. In this case all 7 judges
have already heard the entire case, and their decision was unanimous.
[ Update: The Department of Justice says it will not ask for
an injunction preventing shipment of Windows XP (see 9-Aug-01 below), but
the wheels set in motion over this issue continue to turn, so we're keeping
the chronology updated. ]
Windows XP, due out in October, finally unites the Windows95/98/Me line
and the Windows NT/2000 line with a single code base. It is critical to
Microsoft's future because it is the platform for their "bet the company"
Windows XP was designed under the presumption the Court of Appeals would
completely overturn Microsoft's anti-trust conviction. Since the Court of
Appeals unanimously upheld every count of the conviction, this is a serious
problem. Windows XP contains a lot more of precisely the behavior that got
Microsoft hauled into court in the first place.
Should either the Department of Justice or a competitor succeed in getting
a court injunction holding up shipment of Windows XP, that would be
devastating to Microsoft. It would demonstrate just how much clout the courts
have given to the DoJ and to Microsoft's competitors. It would seriously
interrupt Microsoft's revenue flow, cause a serious drop in their stock price,
and demonstrate that all phases of the .Net initiative are highly vulnerable.
Unfortunately for Microsoft, an injunction is a real possibility.
Here is the action so far:
- 27-Jun-01 - The same day the Court of Appeals issued it's guilty
dropped Smart Tags from Windows XP. This controversial feature was just
about certain to get Microsoft hauled into court again.
- 11-Jul-01 - Microsoft announced concessions to the
OEMs, allowing them some flexibility in placing the Internet Explorer
icon in Windows XP and removing user access to Internet Explorer. A careful
reading shows the conditions are vague and concede nothing worthwhile.
It's just a ploy to say, "See, were cooperating with the judgment, so there's
no need to hold up shipment of Windows XP", without actually giving up much
of anything. Unfortunately for Microsoft, it appears everyone can see this
- 13-Jul-01 - The Department of Justice applied to the Court of Appeals
return of the anti-trust case to the District Court by dropping the 52-day
period in which Microsoft can apply for a re-hearing before the court. Their
logic is that since the entire Court, all 7 justices, heard the case, and the
decision was unanimous, the court will not grant a re-hearing, so why wait?.
It is obvious the DoJ wants the case back in court as soon as possible to
give them time to request an injunction preventing shipment of Windows XP.
- 17-Jul-01 - Microsoft
removed Java from Windows XP. Users who need the Java virtual machine to
access Web sites can download it automatically. The reason for Microsoft's
action is simple and obvious. Sun Microsystems is one of the most likely
companies to launch a private anti-trust action against Microsoft, but if
there's no Java in Windows XP, then Sun can't ask for an injunction
- 18-Jul-01 - Microsoft applied to the Court of Appeals for a
re-hearing on the matter of commingling code, one of the very most damaging
parts of the judgment. Since it is very unlikely the Court of Appeals will
agree to re-hear this item, it's seen as a delaying tactic rather than real
hope for Microsoft. They got it in so quickly so the Court would have to
consider it before they simply agreed with the DoJ acceleration request
(see above). The longer the Court takes to consider the matter, the less
likely the DoJ can stop shipment of Windows XP
- 19-Jul-01 - The Court of Appeals asked the Department of Justice to
respond to Microsoft's request for re-hearing. This will take a few
days, but legal experts still expect the re-hearing to be denied.
- 23-Jul-01 - InterTrust sued to halt shipment of Windows XP by amending
it's existing lawsuit charging Microsoft with
violation of it's patents on secure music and video delivery.
- 25-Jul-01 - Rumors surface that Microsoft is attempting to accelerate
development of Windows XP to get it out as much as a month before the official
release date in an attempt to beat an injunction. The reasoning is that the
courts would have a hard time demanding a recall.
- 26-Jul-01 - The Department of Justice submitted their response to
Microsoft's request for a re-hearing, and it all but accuses Microsoft of
a pure stall tactic.
- 27-Jul-01 - Microsoft made it clear in a press conference there will
be no settlement. Monday's talks with the DoJ ended without scheduling further
talks, indicating the DoJ stood firm on their advantage. Microsoft has once
again stated they will win in court (reported in Los Angeles Times).
- The EPIC (Electronic Privacy
Information Center) filed with the Federal Trade Commission for an
against shipment of Windows XP based on privacy issues with .NET.
- 1-Aug-01 - The Court of Appeals denied Microsoft's request for a
re-hearing (as expected). The Court also denied the Department of Justice's
request to fast-track the proceedings. This will negatively impact the
DoJ's ability to get an injunction before the ship date. Still possible,
but more difficult. More on
- 7-Aug-01 - Microsoft has appealed to the U.S. Supreme Court, asking
it to overturn the verdict of the Court of Appeals. This is considered by
legal experts to be just a delaying tactic, since the Supreme Court is
highly unlikely to hear the case at this time.
Microsoft is appealing based on the CoA finding judge Jackson
to be biased. Hmmm. The way I remember it, the CoA said there was an
"appearance" of bias in the penalty phase of the trial, but no evidence of
actual bias was found. They considered the "appearance" sufficient
to void the punishment and send it for re-trial. Microsoft is now trying to
project this "appearance" in the penalty phase back to "actual bias" in
the finding of fact phase.
- 7-Aug-01 - Microsoft has petitioned the Court of Appeals to take
no further action until the Supreme Court has answered their appeal. This
makes it all the more obvious they're just playing for time to get XP out
the door in full knowledge it's illegal. They know if anyone can get to a
judge with jurisdiction an injunction will be issued.
- 9-Aug-01 - The Department of Justice will not attempt to stop the
release of Windows XP (unless they change their mind). Their reasoning is
simple and logical. First, the proof of harm standard set by the Court of
Appeals is difficult to meet in such a short time. Second, The PC industry
claims it's depending on XP to bring it out of a slump and the DoJ doesn't
want to be blamed for keeping them there. Third, should the DoJ not meet
the standard for proof of harm in so short a time, and a requested injunction
is denied by the District Court, that would be embarrassing to the DoJ.
Another reason could be to simply let Microsoft hang themselves. XP
includes much more just like what got them hauled into court in the first
place. Continuing bad behavior after the Court of Appeals verdict may be quite
handy for getting a really harsh penalty. It is clear the DoJ is taking this
case very seriously. They hired Phil Beck, a trial lawyer equal in stature to
the Clinton DoJ's David Boies (the two faced off over the Florida election -
- 10-Aug-01 - The Department of Justice petitioned the Court of Appeals
to not hold up district court proceedings until the Supreme Court has ruled
whether or not it will hear Microsoft's appeal. Microsoft had asked these
proceedings be suspended pending that ruling. The DoJ cited the importance
of settling this case quickly to remove uncertainty from the marketplace and
due to the amount of damage an unrestrained Microsoft can do in even a short
The Supreme Court is expected to rule on this matter in September, and
is expected to decline to hear Microsoft's appeal.
- 14-Aug-01 - Microsoft again requested of the Court of Appeals that
they delay any further action until the Supreme Court rules whether or not
to hear their appeal (they are expected to rule in early October). This
company is getting really desparate!
- 17-Aug-01 - As expected, the Court of Appeals told Microsoft there
would be no delay. The court added,
"It appears that Microsoft has misconstrued our opinion". Well, surprise!
Random selection of a new District Court judge will now be made, and retrial
of the panalty phase will begin in about a week.
- 24-Aug-01 - A new judge was chosen from the DC Circuit Court pool by
computerized lottery. The judge appointed to retry the tying issue (if the
Department of Justice decides to do so) and set the final remedy is Colleen
Kollar-Kotelly. Judge Kollar-Kotelly has no significant previous experience
in anti-trust cases, but is married to a lawyer who defends corporations
against the government in anti-trust cases. Not being privy to their family
life, I will not issue an opinion as to whether this will be a factor in any
- 24-Aug-01 - Microsoft officially released Windows XP to manufacturing
with a big to-do in Redmond. The press was escorted off the campus as soon as
the official program was over, probably for fear
CEO Steve Ballmer
might dance again.
- 29-Aug-01 - Judge Kollar-Kotelly let it be known the case would
proceed on an accelerated schedule. The DoJ and Microsoft are to submit a
joint proposal for what information they will need from each other and for
the schedule to complete the case. The proposal is due 14 Sep 01, and a
hearing is scheduled for 21 Sep 01 to formalize the schedule. If the DoJ
and Microsoft cannot come up with a joint proposal, separate proposals will
- 30-Aug-01 - The Department of Justice petitioned the Supreme Court
to not hear Microsoft's appeal. They referenced the Court of Appeals statement
that "It appears that Microsoft has misconstrued our opinion" It is still
thought highly unlikely the Supreme Court will agree to hear Microsoft's
- 06-Sep-01 - The Department of Justice announced it would not seek
a breakup of Microsoft, nor would it seek to re-argue the issue of "tying"
the browser to Windows. This will allow the court to proceed immediately to
the penalty phase. More on this subject and analysis in our news item
Justice Drops Microsoft Breakup.
- 06-Sep-01 - Anti-trust charges have been filed in South Korea with
the intent of halting distribution of Windows XP in that country. A major
ISP (Internet Service Provider) has charged that the inclusion of Microsoft
Instant Messaging in Windows XP competes unfairly with other companies that
offer Instant Messaging services.
- 07-Sep-01 - California and New York announced they would seek remedies
beyond those so far proposed by the Department of Justice, and that these
remedies would be targeted to force changes in Windows XP. Many consider
Windows XP to include significant anti-trust violations.
- Andrew Grygus