A unanimous US federal appeals court overturned the court-ordered breakup of Microsoft, saying in a rare rebuke that the trial judge "seriously tainted" the case with his derogatory comments about Bill Gates and his business empire. But the appellate judges said the software giant violated antitrust laws.
In a 7-0 ruling Thursday, the US Court of Appeals for the District of Columbia Circuit set aside the breakup order, narrowed the antitrust case and sent it to a new judge to decide whether a breakup or some other penalty is warranted for the software giant.
Although US District Judge Thomas Penfield Jackson engaged in serious misconduct, the appeals judges said, "We agree with the District Court that the company behaved anti-competitively ... and that these actions contribute to the maintenance of its monopoly power."
Though its legal troubles aren't behind it yet, Microsoft's stock shot up, as did the spirits of company executives.
"Every company must have the ability to innovate and improve its products," Gates said. But the world's richest man conceded, "The legal process can be hard on anyone who goes through it."
The Justice Department and state attorneys generals who brought the case also found victory in the conclusion that Microsoft operated an illegal monopoly.
The seven appellate judges narrowed the number of antitrust violations against Microsoft, upholding Jackson's conclusion that the company illegally dominated the market for computer operating systems.
But it threw out the allegation that Microsoft illegally gained a Web browser monopoly, and sent back to the lower court the question of whether Microsoft improperly bundled its Windows operating system with its Web browser.
The appellate judges saved their wrath for Jackson, citing his comments as the reason they vacated his order breaking up Microsoft. Before he ruled, Jackson gave interviews in which he likened Gates to Napoleon and Microsoft to a murderous street gang.
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