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Friday, June 29 3:16 AM SGT

Reaction to Microsoft appeal ruling: both sides claim victory

SAN FRANCISCO, June 28 (AFP) -

Both sides claimed victory Thursday after a complex US Court of Appeals decision that reversed a judge's decision last year ordering the breakup of Microsoft.

While most legal scholars and corporate foes of the company were busy deciphering the 150-plus page decision, groups claiming to represent consumers and Microsoft's corporate rivals both claimed a victory for the company.

"A major win for consumers," declared the Washington-based Citizens for a Sound Economy, which has close ties and received funding from Microsoft during the three-year-old antitrust court battle.

The Software and Information Industry Association (SIIA) praised the decision on the grounds that it showed that Microsoft had, indeed, been a corporate bully.

"We applaud the Court of Appeals decision today in finding that Microsoft possesses monopoly power," said the organization.

Ken Wasch, SIIA president, told AFP that the group receives funding from Sun Microsystems, Oracle and other high-tech firms, all virulent opponents of Microsoft.

The appeals court handed both sides fodder for their glee.

The appellate judges did agree with US District Judge Thomas Penfield Jackson that Microsoft had engaged in a wide-ranging pattern of illegal monopoly practices.

Among the courts findings: the company had illegally pressured programmers to develop software only for the company's market dominating operating system; that it had illegally pressured Intel to use Microsoft's version of the Java programming language, and that the company had illegally pressured computer manufacturers to favor Microsoft software.

The appeals court judges, however, overturned Jackson's ruling that the company had violated the law by aggressively pricing and distributing its Internet browsing software -- a huge victory for a company that had been moving aggressively into the Internet market.

The appeals court also halted a break-up of the company that had been ordered by Jackson, in large part because of the trial judge's scathing public criticisims of Microsoft and its co-founder Bill Gates. For instance, compared his breakup order to training a mule by having it "whopped" over the head with a substantial piece of lumber.

Wall Street cheered the decision, especially the reversal of Jackson's break-up order. Microsoft Corp shares were upgraded to "buy" at JP Morgan following the decision.

JP Morgan analyst Chris Galvin said the decision "holds psychological significance" for Microsoft as it attempts to rebuild its image and concentrate on the raft of new products it has or is about to launch."

Nicholas Economides, professor of economics at New York University's Leonard Stern Business School, termed the appellate decision a "big victory for Microsoft" saying it would probably force a settlement on the case.





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