Near Halftime, the Score Is...
With Justice almost finished presenting its case, Business Week asks seven experts: Who is winning, and why?

It's holiday vacation time in the Microsoft trial. On Wednesday, Dec. 16, Judge Thomas Penfield Jackson called a recess in the case and told everybody to come back Monday, Jan. 4, 1999.

So now's a good chance to take a breather and ask: Which side is winning? Business Week called several leading economists, attorneys, and law school professors to find out. The consensus: The Justice Dept. is ahead -- for the time being. Most of the experts expect the government to beat Microsoft in Judge Jackson's courtroom, but they warn that the victory is likely to be reversed, at least in part, by appeals courts.

Many of those interviewed said that because Microsoft hasn't yet presented its 12 witnesses, it's hard to evaluate fully the strength of the company's case. Microsoft's turn will come in mid-January, after Justice presents its final two witnesses, Intuit Inc. CEO William H. Harris and Massachusetts Institute of Technology economist Franklin Fisher.

Here are the experts' answers to two questions: Who is winning? And Why?

Robert E. Litan, director of economic studies, Brookings Institution:
The government is ahead, but it's not a rout. If this were a baseball game, it would be something like 2 to 0, or 3 to 0. At the end of the day, I believe this judge will rule against Microsoft on one or two liability issues. But remember that this is not a one-game series. There's going to be at least one more game in the appeals court, and maybe another one after than in the Supreme Court.

Hillard M. Sterling, partner, Gordon & Glickson:
The DOJ has not established a convincing antitrust violation. Most significant is the absence of demonstrative anticompetitive impact resulting from Microsoft's conduct. The DOJ has barraged the court with competitors' complaints, but there's little evidence that these competitors are impaired from competing. Nonetheless, given Judge Jackson's not so subtle leanings, I am predicting that Microsoft will lose at the trial level but win on appeal. I can't imagine Judge Jackson siding with Microsoft, nor can I envision the D.C. Court of Appeals permitting this evidentiary record to constitute a Sherman Act violation. There are way too many holes that have not been plugged by the DOJ.

F.M. Scherer, professor of public policy and corporate management, John F. Kennedy School of Government:
The impression I have is that Microsoft is losing. The reason is that there is a lot of documentary evidence in this case. Basically, it appears that Microsoft has not taken any of the precautions that most firms with dominant market positions take to educate the staff about what type of memorandums not to write.

Stephen M. Axinn, partner, Axinn, Veltrop & Harkrider:
The government is winning. They're certainly winning with Jackson, although all that does is get them into postseason play with the Court of Appeals. The reason the government is winning, perversely, is that the defense should make its strongest case during the prosecution's witnesses. What happens is, during the government's case, the DOJ puts up its witnesses, and Microsoft gets to shoot them down. You embarrass them, and shock them, and surprise them, and schmutz them up. The minute [Microsoft] puts its own witnesses on, and they start uttering platitudes about motherhood, apple pie, and the flag, then [lead Justice attorney David] Boies will come and shoot them in the gut. Basically, Microsoft should be winning in the plaintiff's case. But they're losing in the plaintiff's case, and that's a sign that they are going to lose big time when they get into their own case.

Terry Calvani, partner, Pillsbury Madison & Sutro; lecturer in antitrust law, Harvard Law School:
I don't know who's winning. I do think, though, that the Netscape-America Online transaction will be quite a significant factor and that it cuts in Microsoft's favor.

Eleanor M. Fox, professor of antitrust law, New York University Law School:
It looks to me as if the government has introduced enough evidence for the court to find that Microsoft has a monopoly and that its practices are not competitive. If the facts the government is presenting hold up [during Microsoft's half of the case], I would think victory will go to the plaintiff. But [Justice] will have a hard time winning on the product-integration issue. Microsoft has a very good argument that courts should not second-guess product development and product changes and should not intervene unless the integration does not serve any good consumer end.

Richard M. Steuer, partner, Kaye, Scholer, Fierman, Hays & Handler:
The government appears to be ahead. The evidence that just came out that Microsoft was able to demand exclusivity from Disney and Intuit was, to me, the most telling of all. On this issue, exclusive dealing, I think the government is very likely to seek and get relief. Although there's been a lot of dancing around about other issues -- like browser integration and the things Microsoft has done to Netscape -- I think [exclusive dealing] is turning out to be the guts of the case.

France is Business Week's Legal Affairs Editor