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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
UNITED STATES OF AMERICA,
Civil Action No. 94-1564
Hon. Thomas Penfield Jackson
REPLY MEMORANDUM OF
THE UNITED STATES IN
ITS MOTION FOR JUDGMENT OF CIVIL CONTEMPT AND
TO ENFORCE PRELIMINARY
Court's preliminary injunction prohibited Microsoft from conditioning a license to
Windows 95 on OEMs' licensing and preinstalling Microsoft's Internet browser software.
Seizing neither on the language of the Court's Order nor an analysis of its purpose, but
offer, as the sole alternative it need offer to its conditioned license, a version of Windows 95
will not work. Because the practical consequence is to require that OEMs license
browser, the injunction, as Microsoft implements it, serves only to entrench the very
the Court clearly declared must "abate" (Memorandum and Order ("Mem.") at 17).
Microsoft's position is untenable. Microsoft's refusal to focus on the language
injunction, or to read it "in light of the circumstances surrounding its entry," United
Christie, 465 F.2d 1002, 1007 (3d Cir. 1972), has produced a "patently unreasonable,"
and "tortured construction" of the Court's Order that renders it "a nullity." United States
Greyhound Corp., 508 F.2d 529, 532-33 (7th Cir. 1974). Microsoft's offer of another
an outdated, and therefore to OEMs commercially unviable, version of Windows 95 that
Microsoft nowhere contends comports with its reading of the injunction -- demonstrates
Microsoft's own discomfort with its position and reinforces the conclusion that the Court's
cannot reasonably be read as Microsoft construes it.
Microsoft's refusal to obey the Court's Order required a swift response. The
States accordingly proposed a particular form of relief: that Microsoft make available to
the most recent version of Windows 95 from which Internet Explorer has been (or readily can
OEMs be) "uninstalled" using Windows 95's "Add/Remove Programs" utility. This remedy,
United States explained, would fully effectuate the purpose of the preliminary injunction;
namely, to ensure that Microsoft makes available to OEMs the most current version of
95 (a commercial necessity for them) without also requiring OEMs to offer that which the
regards as Internet Explorer.
Microsoft argues that this proposal threatens an unwarranted intrusion into
design, but that is plainly incorrect. It is Microsoft that has chosen to respond to the
Order by jerry-rigging its own products -- deleting files that otherwise need not be deleted.
contrast, the relief proposed by the United States takes Microsoft's products as it has
them. The proposed remedy simply requires Microsoft to stop enforcing its licensing
in a manner that prevents OEMs from obtaining the benefits of the uninstall capability that
Microsoft already includes in Windows 95 and makes available to end users.
Microsoft now claims that invoking this feature will "degrade" Windows 95 in some
way, this belated assertion is belied by Microsoft's own promotion of Internet Explorer.
Microsoft advertises: "IE uninstalls easily if you want . . . simply [to] get rid of it" (Gaspar
19 Ex. 9).
Court has authority to enter the relief proposed by the United States. The purpose of
the Court's injunction was to prevent Microsoft, through its conditioned licenses, from
"reinforc[ing] its operating system monopoly" or "acquir[ing] yet another monopoly in the
Internet browser market" (Mem. at 17). Microsoft was free to implement any solution it
that avoided the forbidden conditioning; it failed to do so. The relief proposed by the
States merely enforces rather than impermissibly expands the injunction and is necessitated
Microsoft's contumacious failure to comply with the Court's Order.
I. Microsoft Is Violating This
Microsoft admits that its reading of the injunction yields a senseless result
in Opposition ("Op.") at 3). But rather than draw from this the obvious inference that its
construction of the injunction is incorrect Microsoft asserts that this Court entered a
Order (id.). The fault, however, lies with Microsoft, not the Court. Examination of
"language of the order and the objective circumstances surrounding [its] issuance," United
v. Young, 107 F.3d 903, 907 (D.C. Cir. 1997), demonstrates that Microsoft is in clear
both the injunction's "letter and spirit." Greyhound, 508 F.2d at 541; In re Arthur
Franchise Litig., 689 F.2d 1150, 1157 (3d Cir. 1989); Grove Fresh Distribs., Inc. v.
Ltd., 888 F. Supp. 1427, 1438 (N.D. Ill. 1995).
A. The Injunction Prohibits
Microsoft From Effectively Conditioning A License
To A Commercially Viable Version Of Windows On An OEM's
Microsoft's Browser Software
plain meaning of the preliminary injunction is this: Microsoft cannot require an
OEM, either as a matter of contract or practical economics, to take what in ordinary
parlance is "Microsoft['s] browser software" -- specifically, software ordinary users employ
Internet browsing -- as a condition of obtaining a commercially viable version of Windows 95.
At the same time, the injunction does not compel any particular mode of compliance with
proscription as long as Microsoft avoids the forbidden conditioning. Save for this limitation,
injunction, far from amounting to a sweeping "intrusion into product design" (Op. at 2)
"dictate[s] on a file-by-file basis what features and functionality Microsoft can and cannot
include in Windows 95" (Op. at 4), leaves the composition of Microsoft's products to
reading of the preliminary injunction is clearly contemplated by its plain language.
If, as a practical matter, OEMs cannot obtain a commercially viable version of Windows
except also by licensing and preinstalling software ordinary users invoke to obtain browser
functionality, then Microsoft plainly has "implied[ly]" "condition[ed]" a license to
personal computer operating system software" on OEMs "also licens[ing] and
"Microsoft Internet browser software" (Mem. at 19). On the other hand, if the mode of
compliance selected by Microsoft permits OEMs to license a commercially viable version
Windows 95 without "also licens[ing] and preinstall[ing]" what in ordinary commercial
is "Microsoft Internet browser software," then the forbidden "condition[ing]" is absent, and
injunction is not violated.
reading of the injunction is confirmed by "the circumstances surrounding [the
Order's] entry" including "the mischief the injunction seeks to prevent." Christie, 465
1007. The United States commenced this proceeding in order to restrain Microsoft from using
Windows 95 monopoly to injure competition among browsers in violation of Section IV(E)(i)
the consent decree. The government argued, and the Court tentatively accepted, that
Explorer is a separate and not an "integrated" product within the meaning of Section IV(E)(i)
large measure because such web-browsing software "enjoys substantial" "consumer
"independent" from operating system software (Mem. at 12, 15, 16-17). Concluding that
Microsoft's licensing practices must "abat[e]" because they threaten "to reinforce
operating system monopoly" and to garner for Microsoft "yet another monopoly in the
browser market," (Mem. 16-17), the Court entered the preliminary injunction.
purpose of the injunction, in other words, is to ensure that market forces, and not
Microsoft's monopoly power, determine how OEMs satisfy the "independent consumer
for browsers. This purpose would be thwarted if the injunction permitted Microsoft to offer
commercially viable version of Windows 95 only to OEMs that also license the separate
intended to satisfy "independent consumer demand" for browsers -- that which enables
users to invoke browser functionality. At the same time, the Court's objective can be met
without requiring from Microsoft a particular form of compliance. The purpose of the
is not to determine the composition of Microsoft's products, but rather to prevent Microsoft
achieving through its licenses the practical conditioning that threatens to protect and extend
monopoly power. 1
Construction Of The Injunction Is
Misconceived And Amounts
To A Flouting Of The Court's Order
Microsoft does not seriously contest that, contrary to what the injunction
demands, it has
failed to provide OEMs with a commercially viable alternative to its conditioned licenses. 2
Instead, Microsoft insists this straightforward reading of the injunction is "utterly
(Op. at 5). Despite the stridency with which it asserts that it is in full compliance with the
"letter" and "spirit" of the Court's Order (Op. at 7), Microsoft nowhere addresses either
injunction's actual language or its purposes. The reason for these omissions is plain.
Microsoft's construction of the injunction, although it conveniently fits Microsoft's theory
Section IV(E)(i), cannot be squared with elementary principles of interpretation.
Microsoft's entire argument proceeds from the assumption that "[t]he
injunction prevents Microsoft `from forcing OEMs to accept and preinstall the software code
Microsoft itself now separately distributes at retail as "Internet Explorer 3.0"'" (Op. at 6.
(quoting Mem. at 15-16)). Although Microsoft represents that the quoted passage is the
language of the preliminary injunction" (Op. at 6), it is not. Rather, it is simply a passage
the Court's Opinion that explains why the injunction will not cause Microsoft irreparable
Microsoft appears to take this passage to define the phrase "any Internet
software" in the injunction (Op. at 10) and thus to supply the injunction's plain meaning.
Microsoft, however, has "confuse[d] `plain meaning' with literalism." Bell Atlantic Tel.
FCC, 1997 WL 783993, at *1 (D.C. Cir. Dec. 23, 1997). The plain meaning of the
cannot be the construction that "for all practical purposes" "renders" the Order "a nullity."
United States v. Greyhound Corp., 508 F.2d 529, 533 (7th Cir. 1974); Grove
Inc. v. John Labatt Ltd., 888 F. Supp. 1427, 1438 (N.D. Ill. 1995); cf.
United States v.
Granderson, 511 U.S. 39, 59 (1994) (Scalia, J., concurring) (statute cannot be read to
"result" that is "utterly absurd"). Yet, that is precisely the result Microsoft's literal adherence
the passage produces. Under Microsoft's reading of the injunction, it is entitled to offer as
only alternative to its conditioned license a version of Windows 95 that simply will not
Because this effectively requires that OEMs continue to license Microsoft's browser
order to license Windows 95, Microsoft's construction plainly renders the injunction's
prohibition on conditioning the latter on the former a dead letter; it is, therefore, a
unreasonable" reading. Greyhound, 508 F.2d at 533.
surprisingly, when the passage to which Microsoft points is read in light of "the
circumstances surrounding [the injunction's] entry" including "the relief sought by the
party, the evidence produced" in this proceeding and "the mischief that the injunction seeks
prevent," Christie, 432 F.2d at 1007, it lends Microsoft no support. Microsoft explained
Court, well before the Court entered its Order, that Microsoft included in its retail version
Internet Explorer 3 a small number of files that replaced and upgraded certain Windows 95
and that, as a result, requiring Microsoft to offer OEMs a version of Windows 95 without
those files would produce a version of Windows that would not work. See Cole Decl.
55, 78-80, 83-85, 92-93; Supp. Cole Decl. 2-4, 6-8. To argue, as Microsoft now does, that
Court directed it to remove all the files Microsoft includes in its retail version of
Explorer 3 is to presuppose that the Court completely ignored this submission. To the
the Court acknowledged this exact point two pages earlier in its opinion. See Mem. at
Perhaps recognizing that it must find a justification for its position elsewhere
than in the
Court's Memorandum and Order, Microsoft contends that it simply reads the preliminary
injunction to require the precise relief the United States requested. Even if it the Court
adopted the United States' position, the United States asked for no such thing. To be sure,
United States did request an Order prohibiting "Microsoft from forcing OEMs to accept
preinstall the software code Microsoft separately distributes at retail as `Internet Explorer
(U.S. Reply Br. at 16). But Microsoft neglects to mention the government's careful
-- that the United States did not mean to suggest that Microsoft should be
required to offer a
version of Windows that did not work because it failed to include system files Microsoft
happens to distribute in its retail version of Internet Explorer 3 (U.S. Reply Br. at 17).
presaging the most reasonable reading of the sentence to which Microsoft points, the
States explained that Microsoft offered no reason why it would need to withhold from
those system files Microsoft plainly would include in a functional version of Windows
It is Microsoft, not the United States, "that is engaged in revisionist history" (Op. at 5).
Moreover, Microsoft's reading of the injunction is undermined by its own
conduct. If, as
Microsoft contends, it were reasonable to construe the injunction to require that Microsoft
available to OEMs only a nonfunctional version of Windows as an alternative to its present
conditioned license, Microsoft would have done nothing else. However, effectively
that the injunction cannot reasonably be read to mean what Microsoft now says it means,
Microsoft also offered OEMs a second option: "the current retail version of Windows"
what Microsoft characterizes "as the Internet Explorer 3.0 update" (Op. at 6). As it turns out,
option is as commercially worthless to OEMs as the first option and thus also fails to
compliance with this Court's injunction. 3 But the very fact Microsoft hedged its bets with this
option -- which Microsoft nowhere contends by itself satisfies the injunction -- demonstrates
Microsoft's construction of the injunction is a contrivance, adopted not in order "to give effect
its spirit and purpose," Grove Fresh, 888 F. Supp. at 1438, but rather to advance its
Citizens confronted with court orders, whether or not they believe them lawful,
obligation to "obey [them] out of `respect for judicial process.'" GTE Sylvania, Inc.
Consumers Union of the United States, 445 U.S. 375, 387 (1980) (quoting
Walker v. City of
Birmingham, 388 U.S. 307, 321 (1967)). If Microsoft had genuine difficulty discerning
obligations under the injunction, it "could have petitioned the District Court for a
clarification or construction of the order." McComb v. Jacksonville Paper Co.,
336 U.S. 187,
192 (1949). But Microsoft "did not take that course." Id. Nor did it so much as attempt
reasonable interpretation of the injunction's language in light of its context. Rather,
"mak[ing] its own determination of what the [injunction] meant," id.,
implemented a "twisted construction" of the Order that reads it in effect to authorize the
conduct the Court intended to enjoin. 4
II. The Relief Proposed By The United States Is Appropriate And Ensures
Compliance With The Injunction
response to Microsoft's intransigence, the United States proposed a particular form of
compliance: that Microsoft be required to permit OEMs to license the latest version of
95 from which Internet Explorer has been "uninstalled" using Windows 95's "Add/Remove
Programs" utility (Motion for Judgment of Contempt at 3-4). Such relief, the United
explained, will give OEMs the choice of licensing Windows 95 without the attributes that
"independent consumer demand" for the browser -- the visible signs of, and easy user access
browser functionality -- without harming the underlying operating system (see id.
Microsoft complains that the relief proposed by the United States fails to
compliance with this Court's Order and, in any event, will not achieve the result the United
States represents. Microsoft's first contention falls with its unreasonable reading of the
injunction. Microsoft objects that the proposed relief will not bring it into "compliance with
Order" because "the great bulk of Internet Explorer 3.0 remains even after it has supposedly
uninstalled" (Op. at 9-10). But the injunction prohibits Microsoft, through its conditioned
licenses, from distorting competition among browsers. The remedy suggested by the
States prevents the forbidden conditioning; Microsoft's response does not. 5
Microsoft's conduct not only is unfaithful to the purposes of the Court's Order,
but also is
less than faithful to Microsoft's purported interest in preserving for itself the right to design
products as it sees fit. Microsoft's construction of the Order requires it to redesign its own
products -- by deleting files and impairing functionality -- in a manner for which there is
otherwise no occasion. By contrast, the remedy proposed by the United States takes
products just as Microsoft has designed them. It is Microsoft that designed the
feature, that advertises it to the world on its web-site, and that uses it to induce computer users
install Internet Explorer (telling them "IE uninstalls easily if you want . . . simply [to] get rid
it" (Gaspar Decl. 19, Ex. 9)). And it is Microsoft that enables users to uninstall what it
"Internet Explorer" (not "some files from" Internet Explorer) in recognition of the
significance of the files that are deleted by the "uninstall" procedure.
6 The United States simply
asks that OEMs be permitted to benefit from this very uninstall procedure that Microsoft
already created. For precisely these reasons, Microsoft's further contention -- that the
proposed by the United States will degrade functionality users associate with the operating
system (Op. 4, 9-10) -- is curious. Microsoft, as just explained, expressly represents to
consumers that "IE uninstalls easily if you want . . . simply [to] get rid of it" (Gaspar Decl.
Ex. 9), and continues to do so, see IE Challenge (Dec. 25, 1997)
(same); McCarthy Decl. 4 App. 3 (explaining how
"uninstall Microsoft Internet Explorer" from OSR 2 by reinstalling it from another source
then "uninstall[ing] [it by] using the Add/Remove Programs tools"), without warning them of
"degradation" they might experience.
Because it simply makes available to OEMs alternatives that Microsoft's own
shows it believes consumers will find desirable, the proposed remedy, far from "advanc[ing]
conceivable goal of the antitrust laws" (Op. at 11), furthers antitrust objectives. The point,
course, is not to hinder Microsoft's efforts to create improved products, but rather to
Microsoft from using its Windows monopoly to place a thumb on the scale in browser
competition. As this Court noted, "[t]he probability that Microsoft will not only continue
reinforce its operating system monopoly by its licensing practices, but might yet acquire
monopoly in the Internet browser market, is simply too great to tolerate until [this case] is
resolved" (Mem. at 17).
III. This Court Has Jurisdiction To Enter The Proposed Order
Microsoft asserts that the relief proposed by the United States amounts to an
request to modify the injunction during the pendency of Microsoft's appeal (Op. 12-14).
contention, premised as it is on Microsoft's incorrect reading of the injunction, is a "deft
semantic [mis]characterization." United States v. Microsoft, 56 F.3d 1448,
1456 (D.C. Cir.
1995). As explained, requiring Microsoft to make available to OEMs the benefits of its
"uninstall" option simply brings Microsoft into compliance with, and thus enforces rather
expands, the existing injunction. It is well-settled that "[a] district court" "after the
appeal has been filed" "may take action to enforce its order in the absence of a stay."
v. Cincinnati Bronze, Inc., 829 F.2d 585, 588 (6th Cir. 1987) (upholding entry of
more specific order that "enforced and clarified" an appealed but unstayed order) (citing
Milliken, Inc. v. FTC, 647 F.2d 1124, 1128-29 (D.C. Cir.) (Mem.), cert.
denied, 493 U.S. 958
ancillary relief proposed by the United States -- a prohibition on retaliation against
OEMs for invoking the "uninstall" option and a requirement that Microsoft notify the Court
the United States, in advance of r
eleasing a product within the injunction's scope, of the nature
the release and the steps Microsoft believes will ensure compliance with the injunction --
similarly is carefully calibrated merely to ensure that Microsoft complies with the
injunction and works no impermissible modification. See, e.g., Meinhold v.
Department of Defense, 34 F.2d 1469, 1480 n.14 (9th Cir. 1994) (explaining that a court
jurisdiction to "issue[ an] amended order to clarify its original injunction and to supervise
compliance in the wake of [a subsequent] motion for contempt"). In any event, Microsoft
concedes that "new fact[ual] develop[ments]" might warrant imposing on Microsoft
obligations in furtherance of the injunction (Op. at 14). The new fact that justifies ordering
proposed relief is Microsoft's contumacious failure to comply with this Court's Order.
enforcing its orders, the district court may adapt the form of the application of its power
according to the resistance to enforcement with which it is confronted." Madden v.
Elevator, Flour and Feed Mill Workers, 334 F.2d 1014, 1020 (7th Cir. 1964), cert.
U.S. 967 (1965).
Microsoft, not the United States, that improperly seeks to rewrite the Court's
injunction. The Court should end Microsoft's disobedience and bring it into compliance.
Dated: December 29, 1997 Respectfully submitted,
Joel I. Klein
Assistant Attorney General
A. Douglas Melamed
Principal Deputy Assistant
Rebecca P. Dick
Director of Civil Non-Merger
Christopher S Crook
Phillip R. Malone
Steven C. Holtzman
Pauline T. Wan
Karma M. Giulianelli
Michael C. Wilson
Sandy L. Roth
John F. Cove., Jr.
Mark S. Popofsky
U.S. Department of Justice
450 Golden Gate Avenue
San Francisco, CA 94102
CERTIFICATE OF SERVICE
The undersigned certifies that on December 29, 1997, copies of the foregoing
MEMORANDUM OF THE UNITED STATES IN SUPPORT OF ITS MOTION FOR
JUDGMENT OF CIVIL CONTEMPT AND TO ENFORCE PERMANENT INJUNCTION
served by facsimile transmission and Federal Express overnight delivery upon:
125 Broad Street
New York, New
James R. Weiss,
Ellis & Rouvelas Meeds
1725 New York
Mark S. Popofsky