Antitrust News, June - August 1998

Coalition Formed to Fight Regulation of High-Tech.   (8/27/98)  A group of computer industry companies has formed the Technology Access Action Coalition (TAAC) to combat government regulation of high-tech industries that inhibits innovation and growth, such as the recent DOJ and FTC actions against Microsoft and Intel.  The group is chaired by Vanstar President, Jay Amato.

Microsoft Antitrust Trial Delayed Until September 23.  (8/20/98)  Judge Thomas Jackson postponed the trial date in the government's antitrust case against Microsoft until September 23.  The trial, which had previously been set to begin on September 8, was delayed by proceedings over whether the press and public would be admitted to the depositions of Bill Gates and others.   Gates will likely be deposed in Seattle next Thursday or Friday, without the press present.

Software Developer Sues Microsoft for NT Source Code.  (8/20/98)  A small Connecticut software developer filed suit in federal court in Bridgeport, Connecticut on Wednesday, August 18, claiming that Microsoft has violated antitrust laws in connection with its Windows NT network server operating system.  Bristol Technology wants the source code.

Appeals Court Grants Stay of Deposition Order.   (8/19/98, 6:30 PM EST.)  The U.S. Court of Appeals for the District of Columbia issued an Order granting Microsoft's Motion for Stay Pending Appeal of the August 11 Order of Judge Jackson that depositions of Bill Gates and others be opened to the public and the press.  See, HTML copy of Order.

Microsoft Opposes Media Circus.  (8/18/98)  Microsoft lawyers wrote in a memorandum filed with the Court of Appeals yesterday that opening the depositions of Bill Gates and about 25 others would create a "media circus" with a "carnival atmosphere."

DOJ Approves NAM Plan to Share Y2K Information.  (8/17/98)  The Antitrust Division of the U.S. Department of Justice on Friday announced that it has approved a plan by the National Association of Manufacturers to share Year 2000 compliance information via a website.   See, HTML Copy of DOJ Statement.

DOJ and Press Oppose Microsoft Motion for Stay.   (8/17/98)  Both the Department of Justice and a group of news media filed with the Court of Appeals on Friday their Oppositions to Microsoft's Motion for Stay of Judge Jackson's Order opening the deposition of Bill Gates and others to the public.  Under the accelerated schedule, Microsoft's Reply is due today.

Appeals Court to Decide Microsoft Deposition Issue.  (8/14/98)  The U.S. Court of Appeals has set an accelerated motion schedule for Microsoft's Motion for Stay Pending Appeal.  The Notice of Appeal, and Motion for Stay, were filed on Wednesday, August 12.  The government's response is due today by 3:00 pm.  Microsoft's reply is due by Monday, August 17 at 10:00 am.

Judge Opens Depositions to Public in Microsoft Case.  (8/13/98)  U.S. District Court Judge Jackson ruled on Tuesday, and reaffirmed on Wednesday, that depositions in the government's antitrust suit against Microsoft must be open to the press and public.  Microsoft appealed the decision to the U.S. Court of Appeals.  The matter threatens to scandalize the case, and delay the commencement of trial, currently set for September 8.   See, HTML copy of Order.

Microsoft Files Motion for Summary Judgment.   (8/11/98)  Microsoft filed a Motion for Summary Judgment in US District Court on Monday, August 10, in the antitrust suit filed on May 18 by the Department of Justice and nineteen states.  The motion, which relies on the US Court of Appeals decision of June 23, seeks dismissal of the case.

Judge Jackson Grants DOJ's Pretrial Discovery Motion.  (8/6/98)  Federal District Court Judge Thomas Penfield Jackson granted the government's requests to depose Bill Gates for two days, and to get copies of Microsoft's source code for Windows 95 and 98.  Microsoft attorneys used the hearing to announce that they would file a motion for summary judgment on Monday, August 10.

FTC and Gateway 2000 Enter Consent Agreement.   (7/23/98)  The Federal Trade Commission announced that it has entered into a consent agreement with leading computer manufacturer, Gateway 2000.  Under the agreement, Gateway will pay a fine of $290,000.  The FTC had alleged that Gateway had made "false statements in advertising its refund policy and its on-site warranty service."

Intergraph Files Response to Intel's Appeal.   (7/21/98)  On Monday Intergraph filed with the U.S. Court of Appeals for the Federal Circuit its brief in response to Intel's brief in support of its appeal of the preliminary injunction issued against it by the U.S. District Court.  Workstation maker Intergraph sued chipmaker Intel last year on a wide range of legal theories, including anticompetitive behavior, patent infringement, and antitrust violations of the Sherman Act.

Hatch Schedules Second Microsoft Hearing.   (7/17/98)  Sen. Orrin Hatch announced that the Senate Judiciary Committee, which he chairs, will hold another hearing into Microsoft's business practices on July 23.   The hearing is titled "Competition in the Digital Age: Beyond the Browser Wars," and will feature testimony from an as yet undisclosed panel which will include Microsoft opponents.

Justice Clears WorldCom MCI Merger.  (7/16/98)  The U.S. Department of Justice announced that it has approved the proposed merger between WorldCom and MCI.  The announcement accompanies MCI's announcement that it has reached a deal to sell all of its Internet business to Cable and Wireless.

Antitrust Division Accused of Improper Foreign Contacts.  (7/16/98)  Three Senators wrote a six page letter to Attorney General Janet Reno, and Senator Orrin Hatch, outlining improper conduct by members of the Antitrust Division in encouraging foreign governments to pursue Microsoft.  See, HTML Copy of the Letter.

Intel Answers FTC Antitrust Complaint.   (7/14/98)  Intel filed its Answer to the Federal Trade Commission's administrative antitrust Complaint on Monday.  Chip maker Intel denied that it has monopolized any market, that it has used any unfair methods of competition, or that it has violated any laws.

Judge Sets Trial Date in WorldCom MCI Merger Suit.   (7/11/98)  A federal judge decided Friday that GTE's antitrust suit to enjoin the merger of WorldCom and MCI will go to trial on May 10, 1999.  Discovery will proceed according to standard Federal Rules of Civil Procedure, and will close on March 31, 1999.  GTE had sought a more accelerated discovery process and disposition of the case.

European Commission Clears WorldCom MCI Merger.   (7/9/98)  The European Commission announced Wednesday that it has given conditional clearance to the merger between WorldCom and MCI, subject to a divestiture of MCI's Internet business activities.

Senate Holds Hearing on Convergence and Mergers.   (7/8/98)  The Senate Antitrust Subcommittee held a hearing Tuesday morning on technology convergence and corporate mergers in the entertainment and information industries.  Executives from Time Warner, Disney, AT&T, and Sun Microsystems testified.   AT&T CEO Michael Armstrong argued that its merger with TCI will increase phone competition.

PC Data Survey Shows Windows 98 Is Selling Briskly.  (7/1/98)  A study just released by PC Data estimates that retailers have sold more than 530,000 copies of Windows 98, and more than 180,000 copies of the Plus! 98 companion software.  The Microsoft software upgrade that the Department of Justice has sought to stop went on sale last Thursday.

FTC Denies Intel Motion for More Definite Statement.  (6/30/98)  Federal Trade Commission Administrative Law Judge James Timony denied Intel Corporation's Motion for a More Definite Statement.  The FTC filed an administrative antitrust complaint against Intel on June 8, which Intel argued was too vague.

Sen. Hatch Announces More Microsoft Hearings.   (6/29/98)  Microsoft's leading critic in the U.S. Senate, Orrin Hatch (R-UT), attacked the software company on Friday, and stated that he intends to hold more hearings about Microsoft's business practices.  See, Complete HTML Copy of Hatch Statement.

Nader Pans AT&T/TCI Merger.  (6/29/98)  Ralph Nader, in a letter to FCC Commissioner William Kennard dated today, criticized yet another telecommunications merger.  Nader asserts that the merger of AT&T and TCI would provide new opportunities for AT&T to bundle products and services to the detriment of consumers.

Appeals Court Overturns Microsoft Injunction.   (6/24/98)  The U.S. Court of Appeals in Washington DC overturned Judge Thomas P. Jackson's preliminary injunction against Microsoft in the contempt proceeding which the Department of Justice initiated last October.  The government has also brought a separate Sherman Antitrust Act case against Microsoft.   See, HTML Copy of Court Opinion.

Greenspan Criticizes Antitrust Regulators.   (6/17/98)  Fed Chairman Alan Greenspan testified before a Senate hearing on mergers that there "ought to be a higher degree of humility" in antitrust regulators.   Greenspan did not mention by name either Joel Klein of the Department of Justice or Robert Pitofsky of the Federal Trade Commission.  The two industrial planners testified after Greenspan.  See, HTML Copy of Greenspan's Prepared Statement.

Antitrust Lawyer Named to Top Spot at FTC.   (6/16/98)   John D. Graubert, an antitrust lawyer from the Washington DC law firm of Steptoe and Johnson, and a major contributor to the Democratic Party, has been named Deputy General Counsel of the Federal Trade Commission.  The FTC is increasing its antitrust regulatory activity.  On June 8 the FTC brought a major new administrative antitrust action against chip maker Intel.

Judge Denies Cable & Wireless' Request to Enjoin MCI.  (6/15/98)  U.S. District Court Judge Thomas Jackson denied a motion of Cable & Wireless to enjoin MCI from negotiating to sell its Internet business to any other company.  MCI and WorldCom are under pressure from U.S. and E.U. regulators to divest some Internet assets.   On May 27, MCI agreed to sell certain assets to British telecommunications company Cable and Wireless.   Last Wednesdy Cable and Wireless filed its breach of contract lawsuit.  See, HTML Copy of Complaint.

Judge Limits Witnesses and Testimony in Microsoft II.  (6/10/98)  U.S. District Court Judge Thomas P. Jackson met with Microsoft attorney John Warden and Justice Department attorney David Boies on Tuesday in the chambers of his court in Washington DC to address scheduling matters and streamline the trial starting on September 8.

FTC Brings Administrative Action Against Intel.   (6/9/98)  The Federal Trade Commission filed its long anticipated but weakly grounded administrative action against Intel Corp. on Monday.  The Complaint alleges that Intel is a monopoly that illegally refused to deal with computer makers Compaq, Intergraph, and DEC in order to coerce them into surrendering certain intellectual property rights.  The FTC seeks a "seek and desist" order.   See, HTML Copy of Administrative Complaint.