Editor's Note: This story incorrectly reported that the deadline had passed for the Department of Justice to file an appeal to reinstate an injunction against Microsoft. In fact, that deadline had not yet passed at the time of publication. Wired News regrets the error.
The US Justice Department has declined to file an appeal to reinstate an antitrust injunction against Microsoft, a move that may signal that the government's case is weakening.
Tuesday marked the deadline to appeal the 23 June decision, in which a federal appeals court overturned US District Court Judge Thomas Penfield Jackson's decision against Microsoft (MSFT). Last year, Jackson ruled Microsoft could be forced to offer its Windows 95 operating system and Internet Explorer software separately.
"It will be very difficult for the Justice Department to win the Windows 98 case in light of the Windows 95 ruling," said Jim Veltrop, an antitrust lawyer at Axinn, Veltrop, and Harkrider in New York City.
"The court panel wrote a lot of commentary on the subject, and it will be powerfully persuasive with regard to any decision handed down in the Windows 98 case," he added.
The Justice Department had also asked the judge to hold Microsoft in contempt and fine the company US$1 million a day for breaking a 1995 consent agreement by tying its browser to its operating system.
In May, the Department of Justice and attorneys general from 20 states filed a multi-pronged antitrust suit against Microsoft. The suit charged that Microsoft engaged in anti-competitive and exclusionary practices designed to maintain its Windows monopoly and extend that monopoly into Internet browser software and other areas.
The case was undercut by last month's overturn of the Jackson ruling.
In that reversal, the three-judge panel stated that Jackson had "erred procedurally," by issuing an injunction against Microsoft without giving the company prior notice.
Two of the judges went beyond simply reversing the injunction, concluding that Microsoft had the right to determine the features of an integrated operating system, so long as the software "offers advantages unavailable" to consumers who would otherwise need to purchase the products separately.
In effect, that US Appeals Court ruling recognized Microsoft Internet Explorer and Windows 95 as an integrated product.
The text of the decision went on to say that "antitrust scholars have long recognized the undesirability of having courts oversee product design, and any dampening of technological innovation would be at cross purposes with antitrust law.
"We suggest here only that the limited competence of courts to evaluate high-tech product designs and the high cost of error should make them wary of second-guessing the claimed benefits of a particular design decision," the text said.
Department of Justice officials declined comment on the passing deadline.
Some antitrust experts think the broad language of the decision will have a major negative impact on the Justice Department's antitrust case involving Microsoft’s Windows 98, over which Judge Jackson is scheduled to preside in September.
Antitrust lawyer Joe Sims said the new Justice Department case was on shaky ground.
"The difficulty of these two cases in terms of antitrust law is that the cases are being tried on the notion that if you have a high market share, like Microsoft, that equals monopoly power. There isn't much precedent for monopolization by that definition, in the area of antitrust cases," said Sims, who is with Jones, Day, Reavis, and Pogue in Washington, DC.
Even if the Justice Department loses the Windows 95 case, Veltrop believes it will not affect the government's efforts to prosecute other software companies over antitrust issues.
"The Windows 95/98 case is largely about the browser integration issue," Veltrop said. "There are other antitrust issues out there. This is not the end-all and be-all of cases against Microsoft, or others," he said.
