In a ruling favorable to Microsoft, the US government's antitrust case will next be heard by a federal appeals court.
Ending months of speculation, the US Supreme Court says it will not hear the US Justice Department's case against Microsoft.
The result: The case will now go to the US Court of Appeals, a move that Microsoft and its backers had advocated. Microsoft shares were up in early trading on the news.
The Justice Department and 19 state attorneys-general had requested that the Supreme Court take the case directly, by way of the Expediting Act, which allows the Supreme Court to hear cases of national significance without prior appellate review.
Of the nine high court members, only Justice Stephen Breyer dissented from the full court's action. He said the case "significantly affects an important sector of the economy."
Chief Justice William Rehnquist declined to recuse himself from the Microsoft case, even though the company has hired a law firm in Boston for which his son works. Rehnquist's son is working on a private antitrust case for Microsoft.
Raising expectations?
Microsoft officials emphasised against reading too much into the Supreme Court's decision.
Speaking on US television, Microsoft CEO Steve Ballmer said the Supreme Court decision "is just another step in the process. ... I don't think too much should be read in it either way."
Justice Department spokeswoman Gina Talamona said: "We look forward to presenting our case to the Court of Appeals as expeditiously as possible."
Microsoft filed briefs urging the Supreme Court to remand the case to the Court of Appeals, citing as a reason Microsoft's belief "that the Supreme Court would benefit from an initial review of this case by the US Court of Appeals in the District of Columbia."
In countering Microsoft's arguments, the DOJ said that by bypassing the Court of Appeals, the Supreme Court could manage to shave as much as a year off the expectedly lengthy appeals process.
In June, US District Judge Thomas Penfield Jackson ruled that Microsoft should be broken into two parts as a result of unlawful conduct resulting from its PC operating system monopoly. The judge agreed to stay the enforcement of his order while Microsoft appealed his decision.
"Microsoft is confident of our appellate case and look forward to presenting our appeal to the Court of Appeals," said Microsoft legal spokesman Jim Cullinan. "The next step in the process is that the parties will hear from the Court of Appeals about how it wants to move the case forward.
Cullinan said no schedule has been issued thus far.
Attorney General Tom Miller, the leader of the 19-State Microsoft Working Group, said the group was disappointed in the action.
"We continue to believe that prompt and final resolution of this case is in the public interest, and that the Supreme Court is the most appropriate forum for that resolution. Nevertheless, we look forward to presenting our case to the United States Court of Appeals".
