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FC: Old antitrust case now relevant to Microsoft: US vs. United Shoe
From: Declan McCullagh <declan () well com>
Date: Wed, 31 May 2000 11:10:27 -0400
http://www.wired.com/news/politics/0,1283,36581,00.html MS Trial: If the Shoe Fits ... by Declan McCullagh (declan () wired com) 3:00 a.m. May. 31, 2000 PDT WASHINGTON -- The U.S. Justice Department spends years in court battling a world-renowned corporation with top-tier research labs, a 90 percent market share, and an attitude to match. The government wins a court order, but then, some years later and after fierce lobbying from competitors, accuses its antitrust target of violating it. As proper punishment, DOJ lawyers argue, their opponent's attorneys must describe to the trial judge how best to carve their client into competing halves. The judge eventually agrees, and divvies up the corporation. He even forces the company to license its intellectual property freely, no matter how much it objects to the idea. Sound familiar? It should. The case, however, isn't about Microsoft, but one that might soon be surprisingly relevant: U.S. v. United Shoe Corp., the first time a federal court split a single company into pieces. During a hearing last week, the Justice Department and Microsoft each cited United Shoe Corp. to buttress their arguments, and both sides have referenced it in recent legal briefs. When U.S. District Judge Thomas Penfield Jackson decides -- perhaps as early as this week -- what punishment to levy against the software giant, he'll also justify it by discussing United Shoe. Microsoft's final arguments are due on Wednesday, and Jackson could rule any time thereafter. To Microsoft, the considerable delay before the breakup of the shoe equipment-manufacturer provides ample evidence that courts should be reluctant to levy such Draconian penalties. "In United Shoe Machinery, in 1918, the beginning of the battle of the century, the court said that dissolution as a remedy is extreme, even in its mildest demand," said John Warden, a Microsoft attorney. "What I submit makes this remedy so extreme is that ... it will go a very long way to ensuring that Microsoft is the one company in the world that won't win -- can't win -- the next round of competition for the market," Warden said. The Justice Department spent half a century battling the shoe equipment-maker in court, finally persuading the Supreme Court to agree in 1968 that the company should be taught a lesson, dismembered, and forbidden to compete with its former selves for five years. Justice Department attorney David Boies said that's a perfect precedent to apply to Microsoft. "Microsoft comes forward with this definition of what they call 'unitary companies' that are not supposed to be broken up. Now, the first example, of course, of a unitary company that was broken up was United Shoe," Boies said. [...] -------------------------------------------------------------------------- POLITECH -- the moderated mailing list of politics and technology To subscribe, visit http://www.politechbot.com/info/subscribe.html This message is archived at http://www.politechbot.com/ --------------------------------------------------------------------------
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- FC: Old antitrust case now relevant to Microsoft: US vs. United Shoe Declan McCullagh (May 31)