Antitrust News: February - May 1998
MCI Plan to Sell Internet Backbone Doesn't Placate GTE. (5/29/98) MCI announced on Thursday that it plans to sell much of its Internet backbone infrastructure to the British telecommunications company, Cable & Wireless. The proposed merger of MCI and WorldCom has raised concerns that the new entity would concentrate Internet backbone service. The merger is under review by the Department of Justice, Federal Communications Commission, and European Union. Both GTE and Sprint claim that the proposed divestiture does not go far enough.
Judge Sets September Trial Date in Microsoft Case. (5/26/98) Federal District Court Judge Thomas P. Jackson ruled at a hearing on Friday, May 22, that the government's case against Microsoft will go to trial on September 8. The Judge issued no preliminary injunction regarding Windows 98. He also consolidated the cases filed on May 18 by the federal and state governments.
Microsoft Asks for Time to Prepare Defense. (5/22/98) Microsoft filed motions in U.S. District Court in Washington DC on Thursday asking Judge Jackson to allow Microsoft more time to respond to the government's massive motion for a preliminary injunction, and to consolidate the two suits filed by the Department of Justice, and by twenty state governments. The pleadings also include a first look at Microsoft's grounds for opposing the lawsuits. A scheduling hearing is set for Friday at 11:00 am. See, Motion for Enlargement of Time.
The Government Sues Microsoft Again. (5/19/98) The U.S. Department of Justice filed a broad Sherman antitrust action against Microsoft on Monday in the U.S. District Court in Washington, DC, with much fanfare. Twenty states and the District of Columbia also filed a parallel suit. See, HTML Copy of Complaint.
Negotiations Between Microsoft and DOJ Break Down. (5/18/98) Negotiations between Microsoft Corp. and the U.S. Department of Justice regarding an impending antitrust lawsuit have broken down, according to Microsoft. Meanwhile, Microsoft reported in an SEC form Friday that lawsuits against it would "not have a material adverse impact on the Company's financial position or its results of operations."
Microsoft and DOJ Continue Negotiations. (5/15/98) On Thursday, Microsoft agreed to delay its release of Windows 98 to computer manufacturers from May 15 to May 18, and the Department of Justice agreed to delay filing any new antitrust lawsuit until Monday.
FTC Names Top Antitrust Officials. (5/14/98) The Federal Trade Commission just announced appointments to two of its top antitrust slots. Richard G. Parker has been named Senior Deputy Director of the FTC’s antitrust arm, the Bureau of Competition. Randolph W. Tritell has been named as the FTC’s Assistant Director for International Antitrust.
Appeals Court Stays Preliminary Injunction as to Win98. (5/13/98) The U.S. Court of Appeals for the District of Columbia issued an Order staying Judge Thomas Penfield Jackson's preliminary injunction, as it applies to Windows 98. Microsoft will release Win98 to computer manufacturers on May 15. The Appeals Court has not yet ruled on Microsoft's appeal of the entire preliminary injunction. See, HTML copy of Order granting stay.
GTE Files Antitrust Suit Against WorldCom and MCI. (5/11/98) GTE filed an antitrust suit in federal district court in Washington DC on Thursday to enjoin the merger of WorldCom and MCI, claiming that it would create a monopoly in the national market for Internet backbone service in violation of § 7 of the Clayton Act. See: HTML Copy of the Complaint.
PR Campaigning Over Windows 98 Suit Heats Up. (5/6/98) Microsoft hosted a rally in New York City on Tuesday as part of its public campaign to dissuade the Department of Justice and several state Attorneys General from filing suits to enjoin the release of Windows 98. Meanwhile, Microsoft's opponents continue to wage their own publicity campaign. The new software is scheduled for release on June 25.
MSFT CFO Writes Wall Street About Win98 Delay. (5/5/98) Microsoft Corporation's Chief Financial Officer, Greg Maffei, wrote to Wall Street analysts on Monday to describe "the broader economic consequences of an action that might block or delay the launch of Windows 98." Maffei asserted that it would harm PC makers, retailers, software development companies, peripheral device makers, and the whole U.S. economy. See, HTML Copy of the Letter.
Computer Companies Urge DOJ Not to Stop Win98. (5/4/98) Twenty six leading personal computer manufacturers, retailers, chip makers, and software companies sent a letter to the Justice Department warning that government intervention into the launch of Microsoft Windows 98 would harm their businesses, consumers, and the economy. See, HTML Copy of the Letter.
FTC and Digital Agree On Alpha Chip Settlement. (4/27/98) The Federal Trade Commission agreed with Digital Equipment Corp. to approve Intel's and Digital's settlement of patent infringement lawsuits over the high speed, slow sale, 64 bit Alpha chip technology. However, Digital must license Alpha technology to AMD and Samsung, or other companies. See, Complete HTML Copy of FTC Agreement with Digital.
Oral Argument in Microsoft Appeal. (4/22/98) The U.S. Court of Appeals in Washington DC heard oral arguments Tuesday morning in Microsoft's appeal of Judge Thomas Penfield Jackson's preliminary injunction in the case USA v. Microsoft. The Court did not announce its decision, or indicate when it might rule.
Dole and Bork Join the Anti-Microsoft Camp. (4/21/98) Microsoft's opponents announced the formation of a new lobbying group at a meeting at the National Press Club in Washington DC on Monday afternoon. Two of its hired guns, Bob Dole and Judge Robert Bork, addressed the gathering of journalists and representatives of computer industry companies and trade groups.
Bork's Analysis of Microsoft Antitrust Practices. (4/21/98) Most of the allegations to date that Microsoft has violated antitrust laws have centered on the notion that it has engaged in illegal and anti-competitive tying arrangements. The anti-Microsoft crowd's newest lawyer/lobbyist, Judge Robert Bork, has written that tying arrangements are not anti-competitive. This may be some indication that Microsoft's opponents will switch their theory as to how Microsoft is violating antitrust laws.
Transcript of Robert Dole's Statement. (4/20/98) Complete transcript of Bob Dole's statement regarding Microsoft's monopoly to the Pro Comp press conference at the National Press Club on Monday, April 20, 1998.
Judge Rules in Domain Name Registration Suit. (4/10/98) U.S. District Court Judge Thomas Hogan ruled yesterday that fees collected by Network Solutions, Inc. for Internet infrastructure improvements constitute an illegal tax. Otherwise, Hogan dismissed the remaining nine counts of the ten count Complaint. Plaintiffs had also alleged that NSI was an illegal monopoly under the Sherman Act.
John Nannes Appointed to Antitrust Division. (4/3/98) The Department of Justice announced the appointment of John M. Nannes as Deputy Assistant Attorney General of the Antitrust Division on March 27. Nannes was a law partner of Bob Bennett, President Clinton's sexual harassment lawyer, at the time of his appointment. Nannes is one of several recent top level appointments to the team of lawyers investigating and litigating against Microsoft Corp. The appointment does not require Senate confirmation.
FTC and Dell File Consent Decree. (4/3/98) PC manufacturer Dell Computer Corp. and the Federal Trade Commission filed papers today with the U.S. District Court whereby Dell agreed to have a Consent Decree entered against it. The Decree would bar Dell from selling computer systems over the phone or by telephone, that is bundled with software that is not ready to be shipped. The Decree would also fine Dell $800,000.
Blattner Picked to Head Anti Microsoft Campaign. (3/11/98) The Department of Justice hired Jeffrey H. Blattner to be a special counsel for information technology, and point man on the Microsoft case. Blattner is a Ted Kennedy protege with little experience in antitrust litigation, or any other type of legal practice. However, the 43 year Washington insider is a master of hardball politics, grassroots campaigns, and media relations, and possesses a brilliant and energetic mind.
Gates Testifies To Senate Committee. (3/3/98) The Senate Judiciary Committee brought Bill Gates, and some of his most vocal competitors, to Washington for a theatrical exchange in a room packed with the mass media, staff, and spectators. The four hour hearing on Microsoft's competitive practices was held in the largest Senate hearing room.
Klein Testifies Before Senate Antitrust Subcommittee. (2/26/98) Antitrust chief Joel Klein ducked Senate questions about the proposed Computer Associates - Computer Sciences Corp. merger, but used the occasion to ask for more authority, staffing and funding. Klein, the Assistant Attorney General in charge of the Antitrust Division, testified before the Antitrust Subcommittee of the Senate Judiciary Committee on February 26, 1998.