Microsoft triumphed in a five-year battle over federal antitrust charges when an appeals court ordered a federal trial court to approve the company's negotiated settlement with the Justice Department. The three-judge appellate panel also removed U.S. District Judge Stanley Sporkin from the case, finding he had overstepped his authority in ruling against the settlement in February. This is the June 16, 1995 ruling.

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 24, 1995    Decided June 16, 1995

No. 95-5037

United States of America,
 Appellant


v.

Microsoft Corporation


-----

No. 95-5039

United States of America


v.

Microsoft Corporation,
 Appellant


-----

Appeals from the United States District Court
 for the District of Columbia


(94cv1564)


*Joel I. Klein,* Deputy Assistant Attorney General, U.S.
Department of Justice, argued the cause for appellant United

States of America. With him on the briefs were *Anne K. Bingaman,*
Assistant Attorney General, *Catherine G. O'Sullivan, Robert B.
Nicholson, David Seidman* and *Mark S. Popofsky,* Attorneys, U.S.
Department of Justice.

*Richard J. Urowsky* argued the cause for appellant Microsoft
Corporation. With him on the briefs were *Steven L. Holley,
Richard C. Pepperman, II, Andrew C. Hruska, William H. Neukom,
David A. Heiner, Jr., James R. Weiss* and *Donald A. Kaplan.
Margaret K. Pfeiffer* entered an appearance.

*John H. Chapman* argued the cause and filed the briefs for
*amicus curiae* Computer & Communications Industry Association.

*Gary L. Reback* argued the cause for *amici curiae* Computer
Industry Parties. With him on the briefs were *Susan A. Creighton,
David A. Killam, Neil M. Nathanson* and *Irwin R. Gross.*

*Jeffrey S. Jacobovitz* argued the cause for *amicus curiae*
I.D.E. Corporation. With him on the briefs were *Mark L.
Rosenberg* and *Alan A.B. McDowell.*

Before: Edwards, *Chief Judge;* Silberman and Buckley, *Circuit
Judges.*

Opinion for the Court filed by *Circuit Judge* Silberman.

Opinion Per Curiam.


Silberman, *Circuit Judge:* Section 16(e) of the Antitrust
Procedures and Penalties Act, known as the Tunney Act, requires
the district court to determine whether entry of an antitrust
consent decree is "in the public interest." 15 U.S.C. Section
16(e) (1988). In this case, the district court refused to enter a
proposed consent decree the Antitrust Division of the Department
of Justice negotiated with Microsoft Corporation. We conclude that
the proposed consent decree is in the public interest, and that
the district court exceeded its authority in concluding to the
contrary. We therefore reverse and remand with instructions to
enter an order approving the decree.


I.

Microsoft dominates the world market for operating systems
software that runs on IBM-compatible personal computers ("PCs").
Operating systems software controls the operation of the computer
and manages the interaction between the computer's memory and
attached devices such as keyboards, printers, display screens and
disk drives. In 1990, the Federal Trade Commission began
investigating Microsoft's acquisition and maintenance of monopoly
power in that market. When faced with the decision whether to file
a complaint against Microsoft, however, the Commission deadlocked
2-2, thus suspending the agency's investigation.

The Antitrust Division of the Department of Justice then initiated
its own investigation of Microsoft (apparently a rather rare
occurrence), using the FTC's extensive investigatory file as its
starting point. The Department issued 21 Civil Investigative
Demands to Microsoft and third parties, reviewed one million pages
of documents, and conducted over 100 interviews. The Department
also deposed 22 persons, including Microsoft Chairman Bill Gates.

In July 1994, the Department filed a civil complaint under the
Sherman Act, 15 U.S.C. Sections 1 and 2 (1988), charging Microsoft
with unlawfully maintaining a monopoly of operating systems for
IBM-compatible PCs and unreasonably restraining trade of the same
through certain anticompetitive marketing practices.

The key anticompetitive practice against which the complaint is
aimed is Microsoft's use of contract terms requiring original
equipment manufacturers ("OEMs") to pay Microsoft a royalty for
each computer the OEM sells containing a particular microprocessor
(in this case, an x86 class microprocessor), whether or not the
OEM has included a Microsoft operating system with that computer.
The practical effect of such "per processor licenses," it is
alleged, is to deter OEMs from using competing operating systems
during the life of their contracts with Microsoft. The complaint
further charges that Microsoft has exacerbated the anticompetitive
effect of the per processor licenses by executing long-term
contracts with major OEMs, and by requiring minimum commitments
and crediting unused balances to future contracts, thereby
extending the contract term and creating an economic disincentive
for an OEM to install a non-Microsoft operating system.

The other anticompetitive device alleged in the complaint is
Microsoft's use of overly restrictive nondisclosure agreements
with certain independent software vendors ("ISVs"). Those ISVs
provide applications software to run "on top of" Microsoft's
operating system, enabling the user to perform a variety of tasks,
such as wordprocessing. Microsoft provides those ISVs with advance
test versions of its newest operating system so that the ISVs can
develop their software to be compatible with that operating
system. The government alleged that Microsoft, as a corollary, has
imposed nondisclosure agreements on some ISVs which would restrict
their ability to work with competing operating systems companies
and to develop competing products for an unreasonably long period
of time.

The government did not allege and does not contend-and this is of
crucial significance to this case-that Microsoft *obtained* its
alleged monopoly position in violation of the antitrust laws. The
government believes that Microsoft's initial acquisition of
monopoly power in the operating systems market was the somewhat
fortuitous result of IBM choosing for its PCs the operating system
introduced by Microsoft ("MS-DOS"), which, with Microsoft's
successful exploitation of that advantage, led Microsoft to obtain
an installed base on millions of IBM, and IBM-compatible, PCs.

It is undisputed that the software market is characterized by
"increasing returns," resulting in natural barriers to entry.
Because the costs of producing software are almost exclusively in
its design, marginal production costs are "virtually zero."
Professor Arrow, the government's consultant and a Nobel-prize
winning economist, described the importance of Microsoft's large
installed base in an increasing returns market as follows:

A software product with a large installed base has several
advantages relative to a new entrant. Consumers know that such a
product is likely to be supported by the vendor with upgrades and
service. Users of a product with a large installed base are more
likely to find that their products are compatible with other
products. They are more likely to be able successfully to exchange
work products with their peers, because a large installed base
makes it more likely that their peers will use the same product or
compatible products. Installed base is particularly important to
the economic success of an operating system software product. The
value of the operating system is in its capability to run
application software. The larger the installed base of a
particular operating system, the more likely it is that
independent software vendors will write programs that run on that
operating system, and, in this circular fashion, the more valuable
the operating system will be to consumers.



In a not uncommon technique, the Department of Justice filed a
proposed consent decree along with its complaint, which embodied
the Department's and Microsoft's settlement of the case. The
consent decree, which essentially tracks the complaint and is
effective for 78 months following its entry, prohibits Microsoft
from entering into per processor licenses, licenses with a term
exceeding one year (unless the customer opts to renew for another
year), licenses containing a minimum commitment, and unduly
restrictive nondisclosure agreements. To prevent Microsoft from
using other exclusionary practices to achieve effects similar to
those achieved by the practices challenged in the complaint, the
proposed decree also prohibits certain other arrangements such as
lump-sum pricing and variants of per processor licensing. The
decree applies to Microsoft's most popular operating systems
products (MS-DOS, Windows and Windows 95) and successor versions
or operating systems marketed as replacement products. The decree
does not, however, cover "Windows NT" products, which are designed
for sophisticated "high end users" and which do not enjoy a
substantial portion of the market for such products.

Pursuant to Section 16(b) of the Tunney Act, 15 U.S.C. Section
16(b) (1988), the Department of Justice published the proposed
decree in the Federal Register, accompanied by a competitive
impact statement, and invited comment. *See* 59 Fed. Reg. 42,845
(1994). Only five comments were received during the statutory
period, to which the government responded on October 31, 1994.

At the first substantive status conference on September 29, 1994,
the district judge informed the parties that over the summer he
had read a book about Microsoft-*Hard Drive*[n.~1]-because he
"thought it would be a good idea maybe to know as much about
Microsoft as probably they're going to know about me." Much of the
ensuing discussion focused on accusations against Microsoft
contained in the book. The district judge asked whether the
government's lawyers had read the book and whether they had
investigated the allegations made by its authors. In particular,
the judge focused on the allegation that Microsoft engages in
"vaporware," which he described in differing terms but ultimately
defined as "the public announcement of a computer product before
it is ready for market for the sole purpose of causing consumers
not to purchase a competitor's product that has been developed and
is either currently available for sale or momentarily about to
enter the market." *United States v. Microsoft Corp.*, 159 F.R.D.
318, 334 (D.D.C. 1995) ("*Opinion*").[n.~2] (The judge insisted
that even truthful product preannouncements would violate the
securities laws, if not the antitrust laws.)

According to the district judge, *Hard Drive* also claimed that
Microsoft's own applications developers have unfair access to
information about Microsoft's operating systems, giving them an
undue advantage over competitors in developing applications
software that is compatible with Microsoft's operating systems.
The government did not include "vaporware" or unfair access
charges in its complaint against Microsoft.

At a subsequent status hearing on November 2, 1994, the district
judge again referred to *Hard Drive* and its "vaporware"
allegations, noting that the book "does allege some very serious
practices," and telling the government that he wanted to be
satisfied that the allegations in the book were not true. The
Department was instructed to inform interested persons that they
had until December 5, 1994 to seek leave to participate in the
court's hearing on the consent decree. Only I.D.E. Corporation,
which had participated in the comment process, sought leave to
participate in the hearing. But on January 10, 1995, (over a month
late and over the objection of both the government and Microsoft),
the law firm of Wilson, Sonsini, Goodrich & Rosati, on behalf of
three computer industry companies ("Doe Companies"), filed a
96-page memorandum (plus a 215-page appendix) arguing that the
proposed consent decree was inadequate because it would not result
in increased competition in the operating systems market, nor
prevent Microsoft from monopolizing the rest of the software
industry. The Doe Companies claimed that because of the unusual
"increasing returns" nature of Microsoft's market position, it
would be extremely difficult to dislodge Microsoft from its
dominant status and return the market to a state of equilibrium,
or competition. Moreover, they claimed that Microsoft had the
capacity to leverage its installed base in the operating systems
market so as to dominate the related markets for applications and
other software products. The Doe Companies also attached two
documents purporting to show that Microsoft had engaged in
"vaporware."[n.~3] Wilson, Sonsini's brief was accompanied by a
motion requesting that the district court permit the late filing,
and also permit the purported computer industry companies to
remain anonymous, asserting "fear" that they would be subject to
unexplained retaliation from Microsoft. The district court,
without a hearing on the need for or propriety of the Doe
Companies' proceeding anonymously, granted the motion over the
government's and Microsoft's objections.

On January 18, 1995, the United States filed a motion for entry of
the decree (later joined orally by Microsoft at the district
court's January 20, 1995 hearing) and attached an affidavit from
Professor Arrow. As noted, Professor Arrow agreed with *amici*
that in an increasing returns market there is a possibility of
monopolization, which may be inefficient; but, he claimed, this
process is entirely natural. He specifically rejected the notion
that the government should intervene where, as he believed was the
case here, the market success of the dominant firm was not the
result of anticompetitive practices. Professor Arrow concluded
that only artificial barriers, such as the licensing practices
addressed in the decree, should be regulated or prohibited.

The next day the district court issued an order identifying issues
to be addressed at the hearing scheduled for the following day.
The parties were requested to explain why, among other things, the
consent decree did not contain provisions that would (1) bar
Microsoft from engaging in "vaporware," (2) establish a wall
between the development of operating systems software and the
development of applications software at Microsoft, and (3) require
disclosure of all instruction codes built into operating systems
software designed to give Microsoft an advantage over competitors
in the applications software market. *See Opinion,* 159 F.R.D. at
326-27 n.15. The Computer & Communications Industry Association
("CCIA") filed a motion for leave to intervene, or alternatively,
to participate as *amicus curiae.*

The district court allowed I.D.E. Corporation, CCIA and the Doe
Companies to participate in the January 20, 1995 hearing.[n.~4]
All three urged disapproval of the decree. The district judge
devoted substantial time to questioning counsel about "vaporware"
and pressing the government for information regarding its
investigation of "vaporware" allegations-information which the
government declined to provide on the ground that the such
allegations were unrelated to the violations charged in the
complaint.[n.~5]

On February 14, 1995, the district court issued an order denying
the government's motion to approve the consent decree. The judge
stated that he could not find the proposed decree to be in the
public interest for four reasons:

First, the Government has declined to provide the Court with the
information it needs to make a proper public interest
determination. Second, the scope of the decree is too narrow.
Third, the parties have been unable and unwilling adequately to
address certain anticompetitive practices, which Microsoft states
it will continue to employ in the future and with respect to which
the decree is silent. Thus, the decree does not constitute an
effective antitrust remedy. Fourth, the Court is not satisfied
that the enforcement and compliance mechanisms in the decree are
satisfactory.



*Opinion,* 159 F.R.D. at 332.

The judge's understanding of the extent of additional information
he "need[ed]" to make the public interest determination under the
Tunney Act was quite considerable and was of a character that the
government contended was not only outside the scope of the Tunney
Act, but was also improper for a judge to seek. The court required
at a "minimum":

(1) The broad contours of the investigation *i.e.,* the particular
practices and conduct of the defendant that were under
investigation along with the nature, scope and intensity of the
inquiry;



(2) With respect to such particular practices and conduct, what
were the conclusions reached by the Government;



(3) In the settlement discussions between the Government and
defendant: (a) what were the areas that were discussed, and (b)
what, if any, areas were bargained away and the reasons for their
non-inclusion in the decree;



(4) With respect to the areas not discussed at the bargaining
table or not bargained away, what are the plans for the Government
to deal with them *i.e.,* is the investigation to continue, and,
if so, at what intensity, or if the investigation is to be closed,
then the Government must explain why it is in the public interest
to do so.



*Opinion,* 159 F.R.D. at 332.

The judge's second objection, going to the *scope* of the decree,
was predicated on his concern that it does not apply to all of
Microsoft's operating systems. The decree, it will be recalled,
explicitly excludes from its coverage "Windows NT." In an apparent
reference to Microsoft's contention that its product
preannouncements do not fit the definition of "vaporware" and do
not constitute antitrust violations, the court further noted that
"taking into account Microsoft's penchant for narrowly defining
the antitrust laws, the Court fears there may be endless debate as
to whether a new operating system is covered by the decree." *Id.*
at 333.

As to the third point-the essence of the *amici*'s objection-the
judge concluded that the decree does not provide an effective
antitrust remedy because it does not "pry open" the market to
competition, *i.e.,* remedy the monopolist position Microsoft has
achieved through supposed illegal means. The judge was especially
concerned that the decree does not address "a number of other
anticompetitive practices that from time to time Microsoft has
been accused of engaging in by others in the industry." *Id.* at
334. Among such practices were "vaporware," Microsoft's "use[
][of] its dominant position in operating systems to give it an
undue advantage in developing applications software," and its
manipulation of its operating systems to render competing
applications software inoperable or more difficult for consumers
to use. *Id.* at 334-35.

Finally, the court determined that the consent decree did not
oblige Microsoft to adopt sufficient internal compliance
mechanisms. Based on its perception that Microsoft had misled the
court about whether it engaged in "vaporware," the district court
concluded that Microsoft's current staff of "50 or so in-house
lawyers, along with its outside retained counsel," were
insufficient to monitor the decree adequately. *Id.* at 336.

The United States and Microsoft appeal from the order refusing to
enter the decree, asking this court to remand with instructions to
enter the decree. Microsoft appeals as well from the order
allowing the anonymous participation of the Doe Companies (and
CCIA's participation), and asks that the case be remanded to
another district court judge because it contends that Judge
Sporkin has demonstrated personal bias against the company.

Since both parties to the decree have appealed the district
court's order, these consolidated cases present the rare situation
in which there is no appellee. Accordingly, we have allowed the
Doe Companies, CCIA and I.D.E. Corporation to continue in their
roles as *amici.*


II.

Both the government and Microsoft contend that the district judge
vastly exceeded his authority under the Tunney Act, and that as a
matter of law they are entitled to the court's entry of the
consent decree. Before considering their arguments, however, we
are obliged to determine that we have jurisdiction to entertain
this appeal. *Amici* contend that we do not. The government (and
Microsoft) rely on 28 U.S.C. Section 1292(a)(1) (1988), which
authorizes interlocutory appeals from orders of the district court
"granting, continuing, modifying, refusing or dissolving
injunctions...." By refusing to enter the consent decree, the
district court, it is argued, has refused to grant an injunction
within the meaning of that statute. The leading case on point is
*Carson v. American Brands, Inc.,* 450 U.S. 79 (1981), where the
Supreme Court held that a district court's refusal to enter a
consent decree that had the practical effect of denying an
injunction was immediately appealable if the order had a "serious,
perhaps irreparable, consequence," and could only be "effectually
challenged" by immediate appeal. *Id.* at 84, citing *Baltimore
Contractors, Inc. v. Bodinger,* 348 U.S. 176, 181 (1955).

The decree at issue here does, as in *Carson,* call for an
injunction: Microsoft would be permanently enjoined from using
what the government contends are anticompetitive licensing
contracts for its PC operating systems. "Indeed, prospective
relief [is] at the very core of the disapproved settlement." *Id.*
To be sure, in *Carson* the district court indicated its
disapproval of the relief sought by a civil rights plaintiff
because it was arguably too extensive; whereas here, the district
judge is objecting because the relief does not appear to him to go
far enough. *Amici* thus describe the district judge's order as a
refusal to *limit* the potential relief available rather than a
refusal to grant injunctive relief. That seems to us to be only a
deft semantic characterization. It matters not whether a district
judge objects to the injunctive relief as too strong or not strong
enough: in either case, the judge is refusing to grant the
injunction except under conditions that the parties will not
accept. Nor is there any doubt in this case that the district
judge had reached a firm determination. His order and opinion make
that quite clear.

*Amici* nevertheless contend that the government has not shown any
"serious consequences" that justify the interlocutory appeal. The
government, it is argued, is only concerned about its settlement
statistics. We disagree. The district court's refusal to enter the
decree puts the government to a difficult, perhaps Hobson's,
choice. It must either drop its case against Microsoft entirely
and allow Microsoft to continue to engage in practices which the
government believes are anticompetitive; or, it is compelled to
litigate and presumably proceed under a vastly expanded complaint
that in effect asserts that Microsoft engaged in activities which
the government does not believe are illegal (*i.e.,* achieving its
dominant position in the first place), or seeks remedies which the
government does not believe are justified by the evidence.
Moreover, as the government points out, the consent decree is part
of a negotiated settlement. A district judge's refusal to accept
the decree-particularly upon the grounds advanced-cannot but have
enormous practical consequences for the government's ability to
negotiate future settlements. *Cf. Carson,* 450 U.S. at 88 n.14
(order refusing to enter consent decree would undermine Title
VII's strong preference for encouraging voluntary settlement of
employment discrimination claims). The Tunney Act was not intended
to create a disincentive to the use of the consent decree. *See,
e.g.,* S. Rep. No. 298, 93d Cong., 1st Sess. 7 (1973) ("The
[Senate Judiciary] Committee wishes to retain the consent judgment
as a substantial antitrust enforcement tool."); H. Rep. No. 1463,
93 Cong., 2d Sess. 6 (1974) (expressing intent to preserve the
policy of the antitrust laws to encourage settlement by consent
decree), *reprinted in* 1974 U.S. Code Cong. & Admin. News 6535,
6536-37. We conclude, therefore, that the government easily meets
the *Carson* standard. We have jurisdiction over the appeal.

Microsoft has also appealed the judge's refusal to enter the
consent decree. Actually, in this situation, it is doubtful if we
would have jurisdiction unless both parties to the decree
appealed. Certainly if the government accepted the district
judge's view of the case and wished to proceed to trial, the
propriety of the judge's order would be moot; and, if Microsoft
was no longer willing to agree to the government's conditions, the
issue would similarly be moot.[n.~6] Therefore, both parties must
be entitled to appeal the district judge's refusal to enter the
decree. Microsoft in addition appeals one order that the
government does not: the order allowing participation by the Doe
Companies and CCIA. Microsoft asserts that the district court
erred in permitting the Doe Companies to participate anonymously.

Microsoft argues that the order fits within the "collateral order"
doctrine of *Cohen v. Beneficial Industrial Loan Corp.,* 337 U.S.
541 (1949), which permits interlocutory review of collateral
orders "that are conclusive, that resolve important questions
completely separate from the merits, and that would render such
important questions effectively unreviewable on appeal from final
judgment in the underlying action." *Digital Equip. Corp. v.
Desktop Direct, Inc.,* 114 S. Ct. 1992, 1995-96 (1994). Normally,
of course, an order permitting or denying *amici* participation
could not qualify under the doctrine. Here, however, the Doe
Companies, the prime opponents of the decree and the most vigorous
accusers of Microsoft, appeared anonymously. That is quite a
departure from normal procedure, and raises profound questions of
fundamental fairness and perhaps even due process. It might well
be that a party forced to confront an anonymous plaintiff (or the
functional equivalent of a plaintiff acting as an *amici* ) could
suffer injury that might not be redressable in an ultimate appeal.
Anonymity may well confer a kind of immunity which permits a
plaintiff to hurl rhetorical weapons that could cause a unique
kind of harm not faced in ordinary litigation. *Cf. McIntyre v.
Ohio Election Comm'n,* 63 U.S.L.W. 4279, 4286 (U.S. Apr. 19, 1995)
(holding that Ohio election law forbidding all anonymous political
leafletting violated the First Amendment but noting that "[t]he
right to remain anonymous may be abused when it shields fraudulent
conduct"). However, in our view, it is unnecessary to decide
whether Microsoft would have been entitled to appeal this order
independently. Since we have concluded that we have jurisdiction
over the basic appeal, the district judge's order permitting the
*amici* to participate is not really interlocutory. It comes
before us as part and parcel of the record in this case.


III.

Appellants contend that the district judge misinterpreted the
Tunney Act-indeed interpreted that statute so as to raise serious
questions regarding its constitutionality-by basing his rejection
of the decree on considerations which implicate the executive
branch's prosecutorial discretion. The thrust of the judge's
concerns were directed to his dissatisfaction with the framework
of the complaint fashioned by the Department. He thought it much
too modest to deal with the imperfections in the relevant market
and their cause-at least as he perceived them. Appellants contend
that the judge did not simply make the proper inquiry into whether
the decree was appropriate to the complaint, but instead asked
whether the complaint itself was adequate. By doing so, it is
argued, the judge improperly intruded on the government's
prosecutorial role. The judge's demand that he be informed of the
contours of the investigation, the settlement discussions, and the
government's future investigative plans, indicates that the judge
impermissibly arrogated to himself the President's role "to take
care that the laws be faithfully executed."

*Amici,* defending the judge's order, argue that it merely focused
on whether the remedy provided in the decree was adequate to the
allegations in the complaint. Appellants respond, however, that
even to the extent that the judge's order is directed to the
adequacy of the remedy to the allegations actually charged-which
they insist is only a minor theme in the judge's opinion-the judge
nevertheless exceeded his authority. Under our own precedent
dealing with uncontested modifications of a consent decree, we
have repeatedly said that a district judge must approve such
modifications so long as the proposed falls "within the *reaches*
of the public interest." *United States v. Western Elec. Co.,* 900
F.2d 283, 309 (D.C. Cir. 1990) ("*Triennial Review Opinion* ")
(emphasis in original) (quoting *United States v. Bechtel Corp.*,
648 F.2d 660, 666 (9th Cir.), *cert. denied,* 454 U.S. 1083
(1981), in turn quoting *United States v. Gillette Co.,* 406 F.
Supp. 713, 716 (D. Mass. 1975)).

At the heart of this case, then, is the proper scope of the
district court's inquiry into the "public interest." Is the
district judge entitled to seize hold of the matter-the
investigation into the putative defendant's business practices-and
decide for himself the appropriate combined response of the
executive and judicial branches to those practices? With respect
to the specific allegations in the government's complaint, may the
court interpose its own views of the appropriate remedy over those
the government seeks as a part of its overall settlement? To be
sure, Congress, in passing the Tunney Act, intended to prevent
"judicial rubber stamping" of the Justice Department's proposed
consent decree. H.R. Rep. No. 1463, *supra,* at 8, *reprinted in*
1974 U.S. Code Cong. & Admin. News at 6538. The Court was to "make
an independent determination as to whether or not entry of a
proposed consent decree [was] in the public interest." S. Rep. No.
298, *supra,* at 5. Yet, Congress did not purport to alter
antitrust precedent applying the public interest in reviewing
consent decrees. H.R. Rep. No. 1463, *supra,* at 11, *reprinted
in* 1974 U.S. Code Cong. & Admin. News at 6539. The difficulty
with that stated purpose is that there was virtually no useful
precedent-certainly none in which an appellate court had approved
a trial court's rejection of a consent decree as outside the
public interest. *Cf. Antitrust Procedures and Penalties Act:
Hearings on S.782 and S.1088 Before the Subcomm. on Antitrust and
Monopolies of the Senate Comm. on the Judiciary,* 93d Cong., 1st
Sess. 92 (1973) ("Senate Hearings") (Statement of Thomas E.
Kauper, Assistant Attorney General, Antitrust Division, Dept. of
Justice) ("[E]xcept in cases where a previous judicial mandate is
involved and the consent decree fails to comply with that mandate,
or where there is a showing of bad faith or malfeasance, the
courts have allowed a wide range of prosecutorial discretion.").

Although the statute does not give specific guidance, it does
speak in rather broad terms. In determining whether the decree is
in the public interest, the district court is authorized to
"consider":

(1) the competitive impact of such judgment, including termination
of alleged violations, provisions for enforcement and
modification, duration or relief sought, anticipated effects of
alternative remedies actually considered, and any other
considerations bearing upon the adequacy of such judgment;



(2) the impact of entry of such judgment upon the public generally
and individuals alleging specific injury from the violations set
forth in the complaint including consideration of the public
benefit, if any, to be derived from a determination of the issues
at trial.



15 U.S.C. Section 16(e) (1988).

The Ninth Circuit observed (in a case in which the *defendant*
wished to withdraw from the decree) that that language "suggests
that a court may, and perhaps should, look beyond the strict
relationship between complaint and remedy in evaluating the public
interest." *Bechtel Corp.,* 648 F.2d at 666. But it went on to
determine that "we cannot agree that a district court should
engage in an unrestricted evaluation of what relief would best
serve the public." *Id.*[n.~7]

The most prominent post-Tunney Act consent decree, the AT&T
consent decree, was modified by the district judge in several
respects in accordance with his views of the public interest and,
although both the government and AT&T acquiesced, non-parties to
the decree were allowed to intervene for purposes of appealing the
district judge's public interest determination. It does not appear
that any of the appellants challenged the constitutionality of the
Tunney Act, but Justice Rehnquist, speaking for Chief Justice
Burger and Justice White, nevertheless published a dissent from
the order affirming the district court's entry of the decree. *See
Maryland v. United States,* 460 U.S. 1001 (1983). The dissent
expressed grave doubt as to the Act's constitutionality because
without a judicial finding of illegality (a consent decree is, of
course, a settlement), the statute does not supply a judicially
manageable standard for review of the decree, *id.* at 1004, and
the considerations that led the Department of Justice to settle
are not amenable to judicial review, *id.* at 1005-06. *See also
Heckler v. Chaney,* 470 U.S. 821, 831 (1985). For instance, a
settlement, particularly of a major case, will allow the
Department of Justice to reallocate necessarily limited resources.

The government, cautioning us as to the constitutional
difficulties that inhere in this statute, urges us to flatly
reject the district judge's efforts to reach beyond the complaint
to evaluate claims that the government did *not* make and to
inquire as to why they were not made. We agree. Although the
language of section 16(e) is not precise, we think the government
is correct in contending that section 16(e)(1)'s reference to the
alleged violations suggests that Congress did not mean for a
district judge to construct his own hypothetical case and then
evaluate the decree against that case. Moreover, in section
16(e)(2), the court is authorized to consider "the public benefit
the perplexing question of how the district judge could insure a
trial if the government did not wish one, "the issues" referred to
must be those formulated in the complaint. Congress surely did not
contemplate that the district judge would, by reformulating the
issues, effectively redraft the complaint himself. We therefore
dismiss the claim that the last line in section 16(e)(1), the
catchall clause allowing the district court to entertain "any
other considerations bearing upon the adequacy of such judgment,"
authorizes the wide-ranging inquiry the district court wished to
conduct in this case. That language recognizes, *inter alia,* that
a consent decree might well do unexpected harm to persons other
than those "alleging specific injury from the violations set forth
in the complaint." 15 U.S.C. Section 16(e)(2) (1988). And the
district court might ponder those sort of concerns in determining
whether to enter the judgment.

To be sure, the Act also authorizes the district judge to "take
testimony of Government officials ... as the court may deem
appropriate." 15 U.S.C. Section 16(f)(1) (1988). We do not read
this language, however, to authorize the district judge to seek
the kind of information concerning the government's investigation
and settlement negotiations that he wished to obtain here. Even
when a court is explicitly authorized to review government action
under the Administrative Procedure Act, "there must be a strong
showing of bad faith or improper behavior" before the court may
"inquir[e] into the mental processes of administrative
decisionmakers." *Citizens to Preserve Overton Park, Inc. v.
Volpe,* 401 U.S. 402, 420 (1971). Here, the district court is not
empowered to review the actions or behavior of the Department of
Justice; the court is only authorized to review the decree itself.
It is unnecessary to consider whether the district court might
have broader authority to inquire into the Department's
deliberations, even though not authorized to "review" the
Department's action, if there were a credible showing of bad
faith. *See* Senate Hearings, *supra,* at 92. There is no such
claim here.

The district court was troubled that if its review were limited to
the market and practices within that market against which the
complaint was directed, the government could, by narrow drafting,
artificially limit the court's review under the Tunney Act. *See
Opinion,* 159 F.R.D. at 332. We think, with all due respect, that
the district court put the cart before the horse. The court's
authority to review the decree depends entirely on the
government's exercising its prosecutorial discretion by bringing a
case in the first place.

That brings us to *amici*'s contention that the district court was
justified in rejecting the decree as providing inadequate
remedies, even if the court was barred from reaching beyond the
complaint to examine practices the government did not challenge.
The district judge (and *amici* ) believed that the decree would
not "effectively pry open to competition a market that has been
closed by defendant['s] illegal restraints." *Opinion,* 159 F.R.D.
at 333 (quoting *United States v. American Telephone & Telegraph
Co.,* 552 F. Supp. 131, 150 (D.D.C. 1982) (in turn quoting
*International Salt Co. v. United States,* 332 U.S. 392, 401
(1947)), *aff'd sub nom. Maryland v. United States,* 460 U.S. 1001
(1983)). The judge was especially concerned that Professor Arrow
had not explained "how the decree remedies the monopolist position
Microsoft has achieved through alleged illegal means *in an
increasing returns market.*" *Id.* at 334 (emphasis in original).
And he urged that the decree should address "a number of other
anticompetitive practices that from time to time Microsoft has
been accused of engaging in by others in the industry," such as
"vaporware." *Id.*

This argument, it seems to us, merely recasts the district court's
order to make it appear less unorthodox. The complaint did not
allege-because the government did not believe it was true-that
Microsoft's dominant market position resulted from illegal means.
The district court and *amici* would have it be otherwise, but
neither have the power to force the government to make that claim.
And since the claim is not made, a remedy directed to that claim
is hardly appropriate. Of course, such reasoning applies *a
fortiori* to discrete practices such as "vaporware," that the
government does not assert are antitrust violations and which bear
no relationship to the practices against which the complaint is
directed. Even where the government has proved antitrust
violations at trial, the remedies must be of the "same type or
class" as the violations, and the court is not at liberty to
enjoin "all future violations of the antitrust laws, however
unrelated to violations found by the court." *Zenith Radio Corp.
v. Hazeltine Research, Inc.,* 395 U.S. 100, 132-33 (1969)
(citations omitted).

If the essential dispute between *amici* and appellants were more
narrowly cast as objections to the remedies sought, the district
judge would still not be empowered to reject them merely because
he believed other remedies were preferable. As we have said in the
context of reviewing agreed upon modifications of a consent
decree:

The court should also bear in mind the *flexibility* of the public
interest inquiry: the court's function is not to determine whether
the resulting array of rights and liabilities "is the one that
will *best* serve society," but only to confirm that the resulting
settlement is " "within the *reaches* of the public interest.' "



*Triennial Review Opinion,* 900 F.2d at 309 (emphasis in original)
(citing and quoting *Bechtel,* 648 F.2d at 666, in turn quoting
*Gillette,* 406 F. Supp. at 716). Thus, a court should not reject
an agreed-upon modification unless "it has exceptional confidence
that adverse antitrust consequences will result-perhaps akin to
the confidence that would justify a court in overturning the
predictive judgments of an administrative agency." *United States
v. Western Elec. Co.,* 993 F.2d 1572, 1577 (D.C. Cir.)
("*Triennial Review Remand Opinion* "), *cert. denied,* 114 S. Ct.
487 (1993).

The *Triennial Review* cases, dealing with the administration of
the AT&T consent decree, involve a decree the oversight of which
had been the business of a district judge for several years. In
some respects, the parties' request for approval of a modification
to a decree is akin to a request for entry of an initial proposed
decree but, in other respects, it is therefore different. In the
latter situation, it seems to us that the district judge must be
even more deferential than in the former. As Justice Rehnquist
noted in *Maryland v. United States,* when a consent decree is
brought to a district judge, because it is a settlement, there are
no *findings* that the defendant has actually engaged in illegal
practices. *See* 460 U.S. at 1004 (Rehnquist, J., dissenting). It
is inappropriate for the judge to measure the remedies in the
decree as if they were fashioned after trial. Remedies which
appear less than vigorous may well reflect an underlying weakness
in the government's case, and for the district judge to assume
that the allegations in the complaint have been formally made out
is quite unwarranted.[n.~8] We think the district judge's
criticism of Microsoft for declining to admit that the practices
charged in the complaint actually violated the antitrust laws was
thus unjustified. *See Opinion,* 159 F.R.D. at 337; H.R. Rep. No.
1463, *supra,* at 6 ("Ordinarily, defendants do not admit to
having violated the antitrust or other laws alleged as violated in
complaints that are settled."), *reprinted in* 1974 U.S. Code
Cong. & Admin. News 6535, 6536-37. The important question is
whether Microsoft will abide by the terms of the consent decree
regardless of whether it is willing to admit wrongdoing.

After a district judge has administered a consent decree for some
period of time-as is true regarding the AT&T decree-it might be
thought that he would gain at least some familiarity with the
market involved, and therefore the lack of an initial trial is, at
least marginally, less of an inhibition. But when the proposed
decree comes to a district judge in the first instance as a
settlement between the parties that may well reflect weaknesses in
the government's case, the district judge must be even more
deferential to the government's predictions as to the effect of
the proposed remedies than he would be when a modification request
is presented, as in the AT&T cases, long after entry.

Giving due respect to the Justice Department's perception of the
market structure and its view of the nature of its case, we think
the district judge was obliged to conclude that the remedies were
not so inconsonant with the allegations charged as to fall outside
of the "reaches of the public interest." The district court
understandably questioned the government as to why the decree did
not forbid Microsoft from using the alleged anticompetitive
licensing practices with respect to all of Microsoft's operating
systems (in particular, Windows NT products). But the government
explained that Windows NT products do not have "a significant
share of a relevant market at this time."

It might well be that the decree would be strengthened if Windows
NT were explicitly covered (it could also be that this was a
concession the government made in bargaining), but that is of no
great moment. It is undisputed that Windows NT does not have a
dominant market position, and Professor Arrow assured the court
that the decree "appropriately addresses and remedies the
anticompetitive effects of the practices challenged in the
complaint." It is not for us (or the district court) to decide
whether Professor Arrow is correct. "The quality of [his]
presentation[ ] is enough ... to establish an ample factual
foundation for the judgment call made by the Department of Justice
and to make its conclusion reasonable." *Triennial Review Remand
Decision,* 993 F.2d at 1582.[n.~9]

A district judge pondering a proposed consent decree
understandably would and should pay special attention to the
decree's clarity. The government may be entitled to rather broad
discretion to settle with the defendant within the reaches of the
public interest, but the district judge who must preside over the
implementation of the decree is certainly entitled to insist on
that degree of precision concerning the resolution of known issues
as to make his task, in resolving subsequent disputes, reasonably
manageable. We therefore think the district judge was on solid
ground in, at least, inquiring as to the product lines covered in
the decree. *Amici* suggest that in this respect the decree is
ambiguous and that the district judge's refusal to accept it can
be justified on this alternative ground. The decree provides that
"successor versions of or replacement products marketed as
replacements for the [covered products]" are covered by the
decree. But, as noted, Windows NT is specifically excluded. What
would happen, *amici* ask, if Windows NT were somehow to be made
to serve as a replacement or successor to MS-DOS or Windows
products covered by the decree? The government contends (and
Microsoft does not dispute) that in such an unlikely event Windows
NT would be covered as a successor to the covered products. We
think that is the logical interpretation of the decree, and
therefore perceive no continuing ambiguity.[n.~10] In any event,
the district judge's concern was not primarily ambiguous language,
but was rather his perception that Microsoft had a "penchant for
narrowly defining the antitrust laws," and that therefore "endless
debate" might ensue "as to whether a new operating system is
covered by the decree." *Opinion,* 159 F.R.D. at 333. This
observation apparently stems from the "vaporware dispute" between
Microsoft's counsel and the district judge, as well as from
Microsoft's unwillingness to concede that the practices covered by
the decree violated the antitrust laws. As we have already noted,
the judge's conclusions about Microsoft's behavior past or future
are, *on this record,* unwarranted.

Similarly, we would expect a district court to pay close attention
to the compliance mechanisms in a consent decree. In this case,
the lack of an adequate compliance mechanism was the final ground
the district judge advanced for rejecting the decree. The district
judge appeared to be concerned, however, with a great deal more
than the decree. Although the court recognized that Microsoft
employed "50 or so in-house lawyers, along with its outside
retained counsel," all available to monitor compliance, he
indicated that the company ought to be obliged to employ an
internal compliance officer, such as a private inspector general.
The judge, in accordance with his previously described views of
Microsoft's business practices and positions taken in court,
believed the decree should seek to fundamentally alter Microsoft's
culture, perhaps even reduce its competitive zeal. Suffice it to
say, those objectives exceed any legitimate concerns about actual
compliance with the decree.

* * * *



When the government and a putative defendant present a proposed
consent decree to a district court for review under the Tunney
Act, the court can and should inquire, in the manner we have
described, into the purpose, meaning, and efficacy of the decree.
If the decree is ambiguous, or the district judge can foresee
difficulties in implementation, we would expect the court to
insist that these matters be attended to. And, certainly, if third
parties contend that they would be positively injured by the
decree, a district judge might well hesitate before assuming that
the decree is appropriate. But, when the government is challenged
for not bringing as extensive an action as it might, a district
judge must be careful not to exceed his or her constitutional
role. A decree, even entered as a pretrial settlement, is a
judicial act, and therefore the district judge is not obliged to
accept one that, on its face and even after government
explanation, appears to make a mockery of judicial power. Short of
that eventuality, the Tunney Act cannot be interpreted as an
authorization for a district judge to assume the role of Attorney
General.

Accordingly, the case is remanded with instructions to enter the
proposed decree.





*Per Curiam:* Microsoft requests that this case be remanded to
another district court judge because Judge Sporkin has
demonstrated actual bias against the company. We do not lightly
conclude that a bias claim has been made out. *See SEC v. First
City Financial Corp.,* 890 F.2d 1215, 1221-23 (D.C. Cir. 1989).
But both the recusal statute, 28 U.S.C. Section 455(a)
(1988),[n.~1] and our general supervisory power to "require such
further proceedings to be had as may be just under the
circumstances," 28 U.S.C. Section 2106 (1988), allow us to
reassign this case to a different judge on remand. *See Liteky v.
United States,* 114 S. Ct. 1147, 1156-57 (1994). To do so, we need
not find actual bias or prejudice, but only that the facts "might
reasonably cause an objective observer to question [the judge's]
impartiality." *Liljeberg v. Health Servs. Acquisition Corp.*, 486
U.S. 847, 865 (1988).[n.~2]

We are deeply troubled by several aspects of the proceedings in
district court. As we have made clear, it was error for the judge
to inquire into allegations outside the complaint. That a judge
commits error, of course, is by itself hardly a basis for imputing
bias or even the appearance of partiality. But a review of the
transcripts in this case makes it patently obvious that the reason
for the judge's broad-ranging inquiries was his acceptance of the
accusations in the book *Hard Drive.* The district judge's
reliance on that book contaminated the entire Tunney Act review.
Perhaps the most serious example was the district judge's
insistence on dwelling on the book's charges regarding
"vaporware." After reviewing the transcripts and the district
judge's opinion, an objective observer is left with the overall
impression that the district judge had formed an opinion about
Microsoft's practices based on *Hard Drive,* and therefore was
unwilling to accept a consent decree that did not address
"vaporware" (as well as various other allegations made in the
book). The following colloquy is just one of many that leaves this
impression:

THE COURT: You see, what you have to explain to me is why not if
these other practices-say while we're cleaning up this mess, why
don't we also take care of-you must agree that vaporware is a
problem. You must agree that to give Microsoft an advantage
because their applications people have access to their operation
people-



MS. BINGAMAN (for the government): Let me go to that.



THE COURT: In other words, it would seem to me to say, hey, look,
we don't want to come back and sue you next week. We don't want to
come back and sue you every Monday and Tuesday. You ought to clean
up this mess. They've got 50 lawyers there. They can make sure
that they're doing it.



MS. BINGAMAN: Here's the answer, Your Honor. If I had a case that
I could file today on those practices, I would file it. I've said
that repeatedly.



THE COURT: Well, I know, *but you don't have to have a case.*



The book's allegations are, of course, not evidence on which a
judge is entitled to rely, nor are those unsworn allegations even
grounds upon which to interrogate the government about its
position with respect to those allegations.

We are similarly distressed by the district judge's decision to
allow the Doe Companies to proceed anonymously. We are not aware
of any case in which a plaintiff was allowed to sue a defendant
and still remain anonymous to that defendant. Such proceedings
would, as Microsoft argues, seriously implicate due process.
Indeed, parties to a lawsuit must typically openly identify
themselves in their pleadings to "protect[ ] the public's
legitimate interest in knowing all of the facts involved,
including the identities of the parties." *Doe v. Frank,* 951 F.2d
320, 322 (11th Cir. 1992). "Basic fairness dictates that those
among the defendants' accusers who wish to participate ... as
individual party plaintiffs must do so under their real names."
*Southern Methodist Univ. Ass'n of Women Law Students v. Wynne &
Jaffe,* 599 F.2d 707, 713 (5th Cir. 1979).

Although it is within the discretion of the district court to
grant the "rare dispensation" of anonymity against the world (but
not the plaintiff), even in that situation the court has "a
judicial duty to inquire into the circumstances of particular
cases to determine whether the dispensation is warranted." *James
v. Jacobson,* 6 F.3d 233, 238 (4th Cir. 1993). As part of this
inquiry, the court should take into account the risk of unfairness
to the opposing party, *Wynne & Jaffe,* 599 F.2d at 713, as well
the "customary and constitutionally-embedded presumption of
openness in judicial proceedings." *Doe v. Stegall,* 653 F.2d 180,
186 (5th Cir. 1981). Nor are we aware of any case in which an
*amici*-a friend of the court-has been permitted to remain
anonymous. One might think that such a situation would be a
contradiction in terms. But these *amici* are in any event
apparent adversaries of Microsoft, so they should be no more
entitled to proceed anonymously than if they were plaintiffs.

Here, the district judge accepted the Doe Companies' claims of
fear of retaliation from Microsoft, without inquiry and apparently
with no consideration of what an extraordinary break with
precedent such an action implied. *See Opinion,* 159 F.R.D. at
329. The judge did not fulfill his duty to consider the impact of
anonymity on the public interest in knowing the identities of the
participants in this proceeding, nor did he consider possible
unfairness to Microsoft.

The language of the Tunney Act relied upon by the district
judge-which permits a district court to authorize "participation
in any other manner and extent which serves the public interest,"
15 U.S.C. Section 16(f) (1988)-does not authorize his cursory
dismissal of Microsoft's (and the government's) protests. The
district judge may not rely on that language to abandon all
precedent governing accepted process in federal courts. The public
interest, after all, includes an interest in fairness to all
parties. While "judicial rulings alone almost never constitute
valid basis for a bias or partiality motion," *Liteky,* 114 S. Ct.
at 1157, the district judge's failure to accord any weight to
Microsoft's interests in making its determination adds to the
appearance of bias in this case.

We are also concerned by the district judge's acceptance of *ex
parte* submissions. *See, infra,* n.5. "*Ex parte* communications
generally are disfavored because they conflict with a fundamental
precept of our system of justice: a fair hearing requires "a
reasonable opportunity to know the claims of the opposing party
and to meet them.' " *In re Paradyne Corp.,* 803 F.2d 604, 612
(11th Cir. 1986) (quoting *Morgan v. United States,* 304 U.S. 1,
18 (1938)). *See also Code of Judicial Conduct for United States
Judges,* Canon 3(A)(4) (a judge "should ... neither initiate nor
consider *ex parte* or other communications concerning a pending
or impending proceeding"). Although the district judge stated that
he did not consider the *ex parte* submissions of the Doe
Companies or Apple Computer, Inc., *see Opinion,* 159 F.R.D. at
327-28, he allowed the latter to be filed, and with respect to the
former, he suggested that the government should consider the
redacted material "and if it believes such information is
pertinent to this case, on notice to defendant, it may request the
Court to reopen these proceedings so the information appropriately
may be considered." *Id.* at 327-28 n.16. We think the appropriate
course would have been simply to refuse to accept any *ex parte*
communications.

Finally, we note that the district judge made several comments
during the proceedings which evidenced his distrust of Microsoft's
lawyers and his generally poor view of Microsoft's practices.
*See, e.g., Opinion,* 159 F.R.D. at 336 ("This is the same group
[of lawyers] that has advised its client that "product
preannouncements' to impede competition is proper behavior.");
*id.* at 338 ("Microsoft, a rather new corporation, may not have
matured to the position where it understands how it should act
with respect to the public interest and the ethics of the market
place."). These comments arose out of the district court's
misguided focus on "vaporware" and Microsoft's other alleged
misdeeds, none of which were charged in the complaint.

The combined effect of the foregoing is to cause a reasonable
observer to question whether Judge Sporkin "would have difficulty
putting his previous views and findings aside" on remand. *United
States v. Torkington,* 874 F.2d 1441, 1447 (11th Cir. 1989).
Accordingly, we will remand the case to the chief judge of the
district court, with instructions that it be assigned to another
district court judge.


::::::::::FOOTNOTES::::::::::

1. James Wallace & Jim Erickson, *Hard Drive: Bill Gates and the
Making of the Microsoft Empire* (1992).



2. Based on his reading of *Hard Drive,* the district judge
initially described "vaporware" as "putting out announcements that
are misleading or not true to freeze the competition." When the
judge asked Microsoft whether it engaged in "vaporware" so
defined, Microsoft stated that such charges are "entirely false."
Microsoft did not deny that it preannounced products, but
explained in its subsequent filings that such preannouncements do
not violate the antitrust laws unless they are knowingly false or
misleading when made. The judge rejected Microsoft's position,
stating that Microsoft's lawyer "[n]ever told me that you have
this funny little interpretation of vaporware."



3. In it submissions to the district court, Microsoft rebutted the
claim that the documents evidenced "vaporware" activities.
Microsoft also explained that it preannounces products because
ISVs need such early notification to begin developing compatible
applications software. The district court, however, did not refer
to Microsoft's rebuttal in its opinion.



4. The district court subsequently issued an order denying motions
to intervene by I.D.E. Corporation and CCIA but authorizing them
to participate under Section 16(f)(3) of the Tunney Act, which
allows the district court to "authorize full or limited
participation in proceedings before the court by interested
persons ... in any other manner and extent which serves the public
interest as the court may deem appropriate." 15 U.S.C. Section
16(f)(3) (1988).



5. After the hearing on the consent decree, several *ex parte*
submissions were sent to the district judge. First, the Doe
Companies submitted a supplement to their brief which contained a
redacted exhibit. At the same time the district judge ruled on the
motion to approve the consent decree, he granted Microsoft's
motion to strike the supplement, but only to the extent that it
referred to the redacted exhibit. Then, Apple Computer, Inc. sent
to the district judge an *ex parte* letter (with five attached
affidavits) accusing Microsoft of anticompetitive practices not
related to those charged in the complaint. The judge ordered that
Apple's letter and affidavits be filed, but stated that he did not
consider them. *See Opinion,* 159 F.R.D. at 328-29. Finally,
Andrew Schulman, a software industry commentator, sent the
district judge an *ex parte* letter opposing the consent decree.
In his letter, Schulman stated that he had asked his publisher to
send to the judge a copy of *Unauthorized Windows 95,* Schulman's
latest book. Microsoft states that the judge did not disclose his
receipt of the Schulman letter or book and Microsoft did not
become aware of the letter's existence until the Doe Companies
attached it to their supplemental submission. Upon learning that
the materials Schulman sent to chambers had "become an issue in
this case," the judge ordered that a facsimile from Schulman be
filed. (The order did not refer to Schulman's previous letter
opposing the consent decree.) That facsimile indicates that the
district judge had returned Schulman's unsolicited book (along
with a copy of the district judge's opinion).



6. In a case in which only the defendant appealed (the
government's position is not apparent) the Ninth Circuit concluded
that it lacked jurisdiction. *Equal Employment Opportunity Comm'n
v. Pan American World Airways,* 796 F.2d 314 (9th Cir. 1986),
*cert. denied,* 479 U.S. 1030 (1987).



7. The Ninth Circuit subsequently split as to whether that
language did or did not authorize a district court to look behind
and beyond the complaint to judge the public interest. *United
States v. BNS, Inc.,* 858 F.2d 456 (9th Cir. 1988). The majority
thought a district judge could look to non-antitrust factors, but
not to antitrust concerns in markets other than those alleged in
the complaint. *Id.* at 462-63.



8. On this point, we disagree with *Gillette,* 406 F. Supp. at
715-16, in which the district court stated that "the decree is to
be tested on the basis of the relief provided, on the assumption
that the government would have won."



9.* Amicus* I.D.E. Corporation (which refers to itself as "IDEA")
contends that the decree is inadequate because it does not require
Microsoft to disgorge unused minimum commitment payments that IDEA
made pursuant to its licensing agreement with Microsoft. In other
words, IDEA asserts generally that the remedy should provide
retroactive relief and that it should be tailored to meet IDEA's
particular situation. While the district court may inquire into
whether a decree will result in any positive injury to third
parties, *see* 15 U.S.C. Section 16(e)(2) (1988), in the absence
of such injury, it should not reject an otherwise adequate remedy
simply because a third party claims it could be better treated.
The decree does not preclude IDEA from bringing its own private
antitrust suit against Microsoft to gain the specific relief it
seeks.



10.* Amici* also contend without explanation that the decree
contains a "loophole" by which a next-generation operating system
can be taken outside the scope of the decree if Microsoft sells it
"bundled" with an applications program. We perceive no
interpretation of the decree's definition of covered products
which would allow such a result.



::::::::::*PER CURIAM* FOOTNOTES::::::::::

1. Section 455(a) provides that "[a]ny justice, judge, or
magistrate of the United States shall disqualify himself in any
proceeding in which his *impartiality* might reasonably be
questioned." (emphasis added).



2. Although *Liljeberg* was decided in the context of the recusal
statute, 28 U.S.C. Section 455(a), it guides our analysis under 28
U.S.C. Section 2106.