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Tuesday, 26 September, 2000, 20:46 GMT 21:46 UK
Microsoft claims Supreme Court victory
Microsoft on Tuesday won an important victory in its fight against being broken up when the US Supreme Court ruled that the software giant's appeal should first be heard by a lower court.

The case will now be sent to a Federal appeals court where analysts said the firm could expect to receive a more sympathetic hearing.

Any ruling could also be years in coming, delaying the proposed break-up of the company and possibly making it irrelevant as the high-tech industry continues its rapid evolution.

Chief executive Steve Ballmer said he was relieved by the court verdict and "confident" that Microsoft would eventually win its appeal.

"Having this hang over our heads is not good for us or consumers, and we are happy to get on with it," he said.

Fast-track hope

In June, a US federal judge had found the firm guilty of abusing its monopoly position in the market for operating software and ordered the firm to be split in two.

The US Department of Justice had hoped to put the appeal process on a fast-track by sending the case straight to the Supreme Court - the country's highest legal authority.

Government lawyers had argued that any delay would give Microsoft valuable time to consolidate its dominant position in the market.

Microsoft had contended that the Federal appeals court was more appropriate as it would allow the complexities of the case to be fully considered.

Analysts said the government's strategy had been a gamble that now appeared to have backfired. They said the chance of Microsoft being broken up was now much reduced.

A Federal appeals court had also ruled in favour of Microsoft in a related matter once before, in 1998, giving the firm additional cause to hope for a positive result.

Shares rally

The Supreme Court's judges had ruled 8 to 1 to let an appellate court hear the case first.

The one dissenting judge, Stephen Breyer, had argued that "speed in reaching a final decision may help create legal certainty".

The ruling sent Microsoft shares slightly higher. At the close of trading on Tuesday, the stock stood $1.4375, or 2.35%, up at $62.6875.

However, after the adverse court rulings earlier this year, the share remains sunk at levels well below its 52-week high of 119.838.

The Federal appeals court responded speedily to the ruling, ordering the two sides to propose schedules for the appeals process by 2 October.

See also:

19 Sep 00 | Business
07 Jun 00 | Microsoft
26 Sep 00 | Business
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