A U.S. appeals court has rejected an effort by the state of Massachusetts and two IT industry groups to overturn the antitrust settlement between the U.S. Department of Justice (DOJ) and Microsoft Corp.
The Wednesday ruling rejects appeals by the state of Massachusetts, the Computer and Communications Industry Association (CCIA) and the Software and Information Industry Association (SIIA), which argued that the November 2002 antitrust settlement between Microsoft and the DOJ was not in the public interest.
But in the 83-page ruling, Chief Justice Douglas Ginsburg of the U.S. Court of the Appeals for District of Columbia said the three appellants in the case failed to prove the need for additional antitrust penalties against Microsoft. Among the additional penalties Massachusetts asked for were for Microsoft to release the code for its Internet Explorer (IE) browser and to separate the “commingling” of IE code and the Windows operating system.
The settlement, approved by U.S. District Court Judge Colleen Kollar-Kotelly, went far enough by allowing OEMs (original equipment manufacturers) and consumers to remove IE middleware from the operating system and install competing browsers, Ginsburg wrote. Removing middleware code that affects IE functionality would hurt consumers and independent software developers, and could be nearly impossible to do, Ginsburg said.
“The district court, by remedying the anticompetitive act of commingling, went to the heart of the problem Microsoft had created, and it did so without intruding itself into the design and engineering of the Windows operating system,” Ginsburg wrote. “We say, well done!”
Microsoft did not have an immediate comment on the ruling, but CCIA President and Chief Executive Officer Ed Black said he was disappointed but not surprised in the ruling. Getting the appeals court to overturn the district court’s “presumption of discretion” was a difficult case to make, Black said.
“I don’t think there’s anybody who believes the settlement has had an impact,” Black added. “In the real world, our claim has been validated. Unfortunately, no real competition has increased as a result of the ruling.”
CCIA has no immediate plans to appeal Wednesday’s ruling, Black said.
Massachusetts Attorney General Tom Reilly issued a statement saying the U.S. technology economy will not “reach its full potential unless regulators and the courts are willing to deal with Microsoft and its predatory practices.”
“This was a fight worth fighting because it was about the future of our economy,” Reilly added in his statement. “This decision is bad news for consumers, bad news for competition and ultimately will be bad news for our economy.”