AMICUS BRIEF OF THE STATE OF CONNECTICUT
The State of Connecticut ("State"), through its attorney, Richard Blumenthal, Attorney General of the State of Connecticut, respectfully submits this brief as amicus curiae and in support of the motion for preliminary injunction of the plantiff, Bristol Technology, Inc. ("Bristol"). Bristol claims that the defendant, Microsoft Corporation ("Microsoft"), has engaged in anitcompetitive conduct in violation of federal and state law. Specifically, Bristol contends that Microsoft has unlawfully denied Bristol access to the source code for Microsofts Windows operating systems in an effort to maintain and extend Microsofts monopoly control over operating systems. In seeking preliminary injunctive relief, Bristol has identified the appropriate legal standards governing its claims. Moreover, the relief it seeks is entirely consistent with and will substantially and significantly further the public interest.
I. STATEMENT OF INTEREST OF THE AMICUS
Your Amicus appears in this action because of the significant interest of the State in the proper adjudication of the issues raised in this case.1 The Attorney General is the chief law enforcer of the Connecticut Antitrust Act,2 and has broad rights to prosecute antitrust matters under federal law.3 In addition, the State, under the Connecticut Unfair Trade Practices Act ("CUTPA"), Chapter 735a of the General Statutes of Connecticut, is vested with expansive authority to investigate alleged violations of CUTPA and to undertake enforcement proceedings.
The Attorney General is cognizant of the ever growing importance of computer and software technology to the economy of the nation as a whole and of Connecticut generally, and of the central role that computing in particular plays for many consumers and businesses. The Attorney General views as equally vital the key role such technologies are beginning to play in the dissemination of information. As the States chief antitrust enforcer and a key consumer advocate, the Attorney General believes that fostering competition in such markets is the single best means to ensure that consumers receive the benefits of fairly priced, high quality, and innovative goods and services, and that such markets continue to serve as robust drivers of economic growth.4
There is widespread concern that the competitive health of such markets may be threatened by the practices of a dominant firm, such as Microsoft, which could prevent competing and potentially competing products from getting a "fair market test."5 The Attorney General shares those concerns. Indeed, recent enforcement actions suggests that probing antitrust scrutiny and carefully calibrated action may in appropriate circumstances be necessary and feasible to forestall monopolists in high technology markets from seeking to defend or extend their dominance by co-opting new technologies which they view as competitive threats.6
Public enforcement, however, simply cannot be the sole method to effectuate the goals of competition and fair play sought by Congress, the Connecticut Legislature and the Attorney General because of the limitations on governmental resources. Accordingly, enforcement of federal and state antitrust laws, as well as CUTPA, by private litigants is viewed as an essential concomitant to public enforcement. This is particularly important, where, as here, the interests of the Attorney General, indeed, the public interest, are so closely aligned with the interests of Bristol in fostering vigorous competition in the high technology marketplace by eliminating the obstacles posed by Microsofts anticompetitive conduct.
II. THE PLAINTIFF HAS CORRECTLY IDENTIFIED THE LEGAL STANDARDS GOVERNING ITS CLAIMS
The State concurs with the plaintiffs discussion of the applicable principles of law governing its claims, and assuming that the plaintiff sufficiently establishes its factual allegations, it should be entitled to the relief it seeks. Rather than repeat each element of the plaintiffs legal analysis, however, the State takes this opportunity to focus on several key questions at issue in this matter.
A. Bristol Has Sustained Antitrust Injury And Has Proper Antitrust Standing.
Microsoft asserts that Bristol has not demonstrated either antitrust injury or antitrust standing. The legal arguments on which Microsoft relies are flawed. In typical fashion, Microsoft derisively dismisses Bristol as "simply too insignificant to have any tangible impact on the competition between Windows NT and UNIX." Microsoft Mem. in Opp., at 22 n.1l. Although Bristol may very well be the proverbial David to Microsofts Goliath, the Supreme Court has long established that monopolistic conduct "is not to be tolerated merely because the victim is just one merchant whose business is so small that his destruction makes little difference to the economy." Klors, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 213 (1959).
Microsoft also asserts that Bristol is analogous to a distributor whose relationship with a manufacturer has been terminated and thus has no cognizable antitrust injury. See Microsoft Mem. in Opp., at 22-23. The analogy is hardly apt. Unlike the terminated distributor, Bristol has demonstrated not merely injury to itself, but injury to competition. Bristol does not just deliver a Microsoft product down the chain of commerce; its Wind/U product has the potential for promoting competition between Windows NT and UNIX operating systems. Microsofts anticompetitive conduct, while obviously inflicting harm to Bristol, more importantly serves to stifle competition in these key technology markets.
Microsoft further argues that Bristol lacks standing to pursue its federal and state antitrust claims because Bristol is not a competitor of Microsoft. See Microsoft Mem. in Opp., at 23-25. This contention is based on a distorted view of the law. There is no hard-and-fast requirement that an antitrust plaintiff be a competitor.7 See Blue Shield of Virginia v. McCready, 457 U.S. 465, 484 (1982); Crimpers Promotions, Inc. v. Home Box Office, Inc., 724 F.2d 290, 296 n.6 (2d Cir. 1983), cert. denied, 467 U.S. 1252 (1984). To assess a plaintiffs relationship to the defendant is but one. See Associated General Contractors of Cal., Inc. v. California State Council of Carpenters, 459 U.S. 519, 537-44 (1983). Of particular significance to the standing analysis is the nature and directness of the alleged injury. Id. at 540; Crimpers, 724 F.2d at 294.
The Second Circuits decision in Crimpers is instructive. Although Microsoft accuses Bristol of misreading Crimpers, it is Microsoft that has distorted the import of that case. In Crimpers, a trade show organizer seeking to facilitate contacts between local cable television stations and cable programming producers alleged that Home Box Office, Inc. and Showtime Entertainment Corporation, two cable television networks that dominated the business of obtaining and offering such programming, conspired to cause the trade shows failure. Although the trade show organizer was not a competitor of the defendants, the court nevertheless held hat the plaintiff had standing. The injury to the plaintiff, the court emphasized, was a direct one; indeed, it was the "precisely intended consequence of defendants boycott." Crimpers, 724 F.2d at 294.
The same can be said of Bristols claim against Microsoft. Just as the trade show organizer in Crimpers sought to make competition possible with the middlemen defendants by enabling producers and cable operators to deal directly and the middlemen defendants "allegedly made it suffer for trying to do so," id., Bristol has sought to make Windows applications available to users of non-Windows operating systems, and Microsoft has attempted to injure Bristol to squash this competitive threat. Viewed properly, Bristols injury is "inextricably intertwined" with the injury to competition Microsoft has sought to cause. McCready, 457 U.S. at 484. Bristol plainly has standing under the antitrust laws.
B. The Essential Facilities Doctrine Is A Viable Part Of The Antitrust Laws.
Microsoft heaps scorn on Bristols essential facilities arguments and on the essential facility doctrine itself. Microsoft sets forth quotations from Areeda & Hovenkamp, opining their "belief"8 that the essential facility doctrine "should be abandoned," citing 3A Areeda & Hovenkamp, par. 771c at 176. Courts have not followed this "belief." In International Audiotext Network, Inc. v. AT&T Co., 62 F.3d 69, 72 (2d Cir. 1995), the plaintiff, IAN, premised its claims on the allegation that AT&T abused its dominant position in the market for international telephone calls. Yet, because IAN was not seeking access to any facility, the court properly denied IANs essential facility claim. Importantly, however, there was no hint or expression from the court that the essential facility doctrine itself should be abandoned.
Illinois Bell Telephone Co. v. Haines & Co., 905 F.2d 1081 (7th Cir. 1990), likewise offers no support for Areedas "belief," but rather recognizes the essential facility doctrine in appropriate circumstances. In City of Malden, Missouri v. Union Electric Co., 887 F.2d 157 (8th Cir. 1989), the third case authority cited by Microsoft, the court found no "bottleneck" existed because Malden had reasonable alternatives to purchasing electricity from Union. No wholesale discrediting of the doctrine here, either.
In short, the essential facility doctrine remains viable in antitrust law. See Aspen Skiing Co. v. Aspen Highlands Skiing, 472 U.S. 585 (1985); Delaware & Hudson Ry Co. v. Consolidated Rail Corp., 902 F.2d 174 (2d Cir. 1990); Fishman v. Wirtz, 807 F.2d 520, 539 (7th Cir. 1986); MCI Communications Corporation v. AT&T; 708 F.2d 1081 (7th Cir. 1983), cert. denied, 104 S.Ct 234.
C. Bristols Connecticut Unfair Trade Practices Act ("CUTPA") Claim Does Not Fail In The Absence Of A Contractual Relationship.
At best, Microsofts chimerical assertion that Bristol cannot succeed under CUTPA unless Bristol establishes that Microsoft acted in contravention of Bristol Technology Inc. s contractual rights, Microsoft Mem. in Opp., at 39, borders on the absurd. Microsofts purported defense need not long detain this Court as it is axiomatic that a CUPTA claim - - be it pursued as an unfair trade practice, deceptive trade practice or unfair method of competition - - may arise in the absence of a contractual relationship. See, e.g., Waterbury Petroleum Products, Inc. v. Canaan Oil & Fuel Co., 193 Conn. 208, 228-29, 477 A.2d 988 (1984) (Public Acts 1979, No. 79-210, §1 eliminated privity requirement between plaintiff and defendant in private actions under CUTPA).9
Indeed, the weakness of Microsofts contention is readily exposed in light of Bristols CUTPA claim is grounded upon, among other things, Microsofts refusal to renew claim. If a contractual relationship were to be required, hen such a monopolization claim, which, in turn, gives rise to a CUTPA claim, would be unavailable unless the parties had a contractual relationship. Yet, such an arrangement is not required in order to allege this sort of monopolization. Eastman Kodak v. Image Technical Services, 504 U.S. 451, 481 (1992). Thus, Bristol has properly alleged a cause of action under CUTPA, without relying upon any abrogation of Bristols contractual rights, by having alleged a violation by Microsoft of traditional antitrust law, and by alleging that Microsofts method of competition is offensive to public policy. See E.I. duPont de Nemours & Co. v. FTC, 729 F.2 128, 136-37 (2d Cir. 1984) (unfair trade practice claim may be alleged, among other means, via allegation of traditional antitrust violations as well as through "conduct which, although not a violation of the letter of the antitrust laws, is close to a violation or is contrary to their sprit [citations omitted]."
III. THE RELIEF SOUGHT BY THE PLAINTIFF IS IN THE PUBLIC INTEREST.
Bristol seeks a preliminary injunction requiring Microsoft to make available to it source code for Windows operating systems. This interim relief is fully in the public interest and in particular will serve to promote competition in this critical industry. The enforcement of the antitrust laws and prohibitions against unfair trade practices is a serious and paramount interest of public law and policy.
United States v. Topco Assocs., Inc., 405 U.S. 596 , 610 (1972). See Larsen Chelsey Realty Co., 232 Conn. at 497-98, 656 A.2d 1009; Hernandez v. Monterey Village Assocs. Ltd. Ptshp., 17 Conn. App. 421, 425, 553 A..2d 617 (1989). In no other industry is this more important than in the computer software and operating systems markets in which the spur of competitive market forces to innovation is essential.
Moreover, the public interest will be served by granting interim relief pending the final resolution of the merits of the plaintiffs claims. As Bristol contends, an award of money damages will hardly be an adequate remedy if Microsoft is permitted to destroy Bristols ongoing business in violation of antitrust laws. More importantly, from the perspective of the public interest, preliminary relief is necessary to protect competition. This is an industry that is highly dynamic and fast moving. Because of its dynamic nature, even short-term dislocations can have dramatic long-term effects. The loss of Bristol and its products would constitute a serious irreparable injury to the consuming public and to the competitive health of the industry.
Finally, Microsoft attempts to suggest that, because the Department of Justice ("DOJ") and the State Attorneys General that have brought antitrust actions against it have not also raised the claims that Bristol is pursuing, the public interest must therefore not be implicated. See Microsoft Mem. in Opp., at 46 n.25. This is pure sophistry. Microsoft is correct in one thing: the State Attorneys General will not "leave any stone unturned" to confront and end Microsofts anticompetitive practices. It is, however, for that very reason that the State submits this brief as amicus. Quite plainly, the public interest is implicated, and in the careful balancing that this Court must perform in ordering preliminary injunction, the public interest weighs decidedly in favor of granting the relief Bristol seeks..
For the foregoing reasons, the State respectfully submits that the Court should grant the plaintiffs motion for preliminary injunction.