WASHINGTON -- The Justice Department yesterday appealed a federal judge's decision on Tuesday to strike down its antitrust settlement with the Microsoft Corp., saying that the judge was "squarely wrong" and had overstepped his authority.
Within a few hours, Microsoft announced that it was joining the Justice Department appeal, a move that now officially places the former adversaries on the same team.
Attorney General Janet Reno defended the government's prosecution of Microsoft, dismissing the blistering criticism of Judge Stanley Sporkin of Federal District Court that the proposed settlement was too tame and ineffective.
"We believe we did the right thing in this case," Ms. Reno said. "We thoroughly investigated Microsoft's conduct. We found and brought the case we believed to be supported by the evidence."
Many antitrust experts say the Justice Department is on solid ground. While the judge is clearly allowed to decide whether a settlement would remedy the government's complaints, they said, Judge Sporkin went further in this case by criticizing the government for not bringing enough complaints.
"The law has been pretty clear for quite some time that the exercise of prosecutorial discretion and decision making is exclusively the province of the executive branch," said Charles F. Rule, a Washington lawyer who ran the Justice Department's antitrust division during the Reagan and Bush administrations.
Microsoft is the world's largest producer of software for personal computers and produces MS-DOS, the operating system that provides the basic instructions for 70 percent of all personal computers. The Justice Department carried out a lengthy investigation of Microsoft, and it reached an agreement in July under which Microsoft agreed to drop several of its more disputed licensing practices.
On Tuesday, Judge Sporkin refused to approve the Justice Department's settlement with Microsoft, contending that the government had failed to address a number of important issues and chastising the department for refusing to explain why it had prosecuted only a relatively narrow set of practices.
Rivals of Microsoft argued that the company had used its dominance in operating systems to illegally expand into almost every corner of the industry. Judge Sporkin, citing documents submitted by a lawyer representing an anonymous group of competitors to Microsoft, was particularly vexed about evidence that Microsoft had deliberately pre-announced a software product in order to derail a competitor.
The Justice Department focused on Microsoft's licensing practices, forcing it to adopt changes that made it easier for bTC computer companies to use alternatives to MS-DOS.
Judge Sporkin's decision has thrown the government's case into turmoil. It has also created new uncertainties for Microsoft, which is still seeking antitrust approval to acquire Intuit Inc., the leading producer of personal-finance software.
Justice Department officials argued yesterday that Judge Sporkin's decision was far outside his authority under the Tunney Act, which requires a federal judge to determine whether antitrust settlements are in the public interest.
Anne K. Bingaman, assistant attorney general in charge of the antitrust division, rejected the judge's demand that the Justice Department provide details of its investigation and explain why it had not tried to block certain practices that appeared to him to be anti-competitive.
"The Department of Justice does not and cannot stand up, either in public court or in a press conference or otherwise, and discuss claims that it has not at that point brought," Mrs. Bingaman said.