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Appeals Court Refusing to Reconsider Decision that Microsoft Illegally Commingled Windows OS and Browser

Aired August 2, 2001 - 10:38   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DONNA KELLEY, CNN ANCHOR: Today an appeals court is refusing to reconsider its decision that Microsoft illegally commingled their Windows operating system and Internet browser.

From CNN Financial News Network, CNNfn, Steve Young, our correspondent is with us, to help us explain what this means and what happens from here -- Steve.

STEVE YOUNG, CNN CORRESPONDENT: Well, in short order, it means a setback for Microsoft, which asked some time ago that the court of appeals rehear a key part of the case which said that Microsoft had improperly, illegally commingled different programs within its Windows. This is not what some people have been calling bundling, but it does bear very directly on Microsoft's ability to add features to new versions of Windows, that's very important to the company's strategy. The court was quite clear, it said also that nothing in the court's opinion is intended to preclude the district court's consideration of remedy issues. You could read that the so-called breakup of the company that seemed a few weeks ago to be off the table might not be off the table after off.

The court of appeals is going to appoint a new judge and the Department of Justice had asked that this be don as quickly as possible for the sake of competition, and because Microsoft's new operating system, Windows XP, is due out in October. And the government and the states suing Microsoft are concerned that there not be a sort of fait accompli which the courts lag behind the real world.

To repeat, the news is Microsoft has suffered a defeat. The court had originally ruled 7-0 on this important point. The possibility for Microsoft is that if it is not broken up, it might face something called the bureau of Microsoft, with bureaucrats deciding what can be in Microsoft's products.

Back to you.

KELLEY: Steve Young, before you go, a couple of other points that might help refresh memories as well. Microsoft -- the appeals court had ruled that Microsoft had operated as an illegal monopoly and harmed consumers, and at the same time, reversed Judge Thomas Penfield Jackson's order to breakup that company. You mentioned that, that may be different a little bit now, too, and you mentioned a lower court judge could now be picked, unless Microsoft wants to go to the Supreme Court. Do we know if they have that planned or not, and if they will try and go ahead to that step?

YOUNG: It's a good question. Microsoft, when the court of appeals decision seemed to break up the possibility of a breakup of the company, proclaimed it a victory. But more recently Microsoft has for the first time that it might try to go to the Supreme Court. That is not a slam dunk, especially not when a very high court, the court of appeals, rules 7-0, and at least four of the justices are quite conservative rules, rules 7-0 against the company. Most antitrust experts think it would be unlikely that the Supreme Court would take the case.

KELLEY: Steve Young, appreciate you coming in to help us sort this out, because when it gets so complicated like this, we need to kind of have your help and help us sort this out. It's tough to keep track of.

Steve Young, from CNNfn, thank you very much.

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