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THE MICROSOFT RULING

Breakup of Microsoft Is Overturned on Appeal

Law: Federal court vacates order to split computer giant and rebukes trial judge for 'egregious' ethical violations. But it rules that the company did violate antitrust laws.

June 29, 2001|MICHAEL A. HILTZIK and JUBE SHIVER Jr. | TIMES STAFF WRITERS

As early as September 1999, or nearly a year before his final ruling, Jackson began giving secret interviews to news reporters on condition they not be published until after the trial phase had ended. The interviews, appearing in a flood immediately following the order to split the company into two, revealed his long-term skepticism about Microsoft's case and the truthfulness of Gates and its other witnesses, and his desire to "get its attention" by imposing a sensational penalty.

The conversations exposed Jackson to influences and information that had not been aired in court and to which Microsoft could not respond, the judges said, because many of the interviews predated and foreshadowed his own rulings.

"The public cannot be expected to maintain confidence in the integrity and impartiality of the federal judiciary in the face of such conduct," the judges said. "We believe the line has been crossed."

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Times staff writers Henry Weinstein in Los Angeles and Joseph Menn in San Francisco contributed to this report.

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Microsoft Case at a Glance

In their 125-page ruling, the judges of the appellate court:

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* Upheld Judge Thomas Penfield Jackson's ruling that Microsoft maintained its Windows monopoly through illegal conduct. Left open the possibility of future sanctions, but strongly indicated they did not favor dividing the company.

* Rejected Jackson's finding that the company illegally attempted to monopolize the Web browser market.

* Sent back to the lower court his finding that it illegally incorporated the Explorer Web browser in Windows.

* Disqualified Jackson from presiding further over the case due to his "flagrant" violations of judicial ethics during the trial, but found no "evidence of actual bias."

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What's Ahead

* The parties in the suit can now appeal to the Supreme Court, initiate settlement talks or plead their cases before a new judge.

* Microsoft executives have signaled a willingness to work for a settlement.

--Compiled by NONA YATES/Los Angeles Times

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