Microsoft Chairman Bill Gates says his company will appeal a federal judge's ruling that the software giant violated antitrust laws and consistently acted to hold onto its power over industry competitors.
Microsoft (MSFT) will request an expedited review by the U.S. Court of Appeals, Gates said Monday. He said the appeal will emphasize a 1998 court decision affirming Microsoft's right to support the Internet in its Windows operating system.
"We did everything we could to settle this case and continue to look for new opportunities to solve it," Gates said. "We believe we have a strong case on appeal.
"Our future success depends on our ability to keep innovating in the fastest-moving marketplace on earth," he added during an afternoon press conference. "Microsoft and every company must compete and innovate in order to survive and prosper."
U.S. District Judge Thomas Penfield Jackson found Monday that Microsoft violated the federal Sherman Antitrust Act "by unlawfully tying its Web browser to its operating system" and "maintained its monopoly power by anticompetitive means."
He also said the company attempted to monopolize the Web browser market.
The company will argue in its appeal that both the trial process and the laws cited in the government's allegations were inappropriate, said Microsoft attorney Bill Neukom.
"Until the appeal is over, nothing is settled," said Microsoft CEO Steve Ballmer.
While acknowledging that he anticipated such a ruling, Gates said Jackson's decision "turns on its head the reality consumers know: that our software has helped make PCs more accessible and more affordable to millions."
Microsoft officials said they were not concerned by Jackson's conclusion that the company also could be found liable under state antitrust laws.
"The class-action lawsuits will not distract at all from our appeal. We think they're misguided," Ballmer said. "Consumers haven't been harmed. We're a company that's created consumer benefits.
"We’re a company of incredible integrity," he added. "We’re a company that’s competed hard and that’s what were supposed to do. I don’t think the law, nor consumers, nor the industry would be better served if we didn’t do that."
Gates said he was heartened that Jackson found Microsoft's marketing arrangements with other companies to be lawful, adding that "nothing along those lines prevented [browser competitor] Netscape from getting onto anyone's computer."
Jackson said in the ruling that "Microsoft's multiple agreements with distributors did not ultimately deprive Netscape of the ability to have access to every PC user worldwide to offer an opportunity to install Navigator. Netscape was able to distribute 160 million copies of Navigator, contributing to an increase in its installed base from 15 million in 1996 to 33 million in December 1998."
Gates said in an interview in Monday's Wall Street Journal that the company will continue to integrate its Internet browser into Windows software -- the major bone of contention in the government's lawsuit.
Jackson's ruling came after settlement talks between Microsoft and the government broke down Saturday after four months of mediation.
"We really put our heart, our souls, our time" into settlement talks, Ballmer said.
"While we remain very open ... we would like to see an appropriate openness" on the part of the government in any future discussions, he said.
