Microsoft Antitrust Remedies Due

WASHINGTON (04/28/2000) - The U.S. Department of Justice is expected to formally request a breakup of Microsoft Corp. on Friday, but some partner plaintiffs in the antitrust action apparently dissent.

Nineteen states and the District of Columbia joined the federal government in the antitrust suit, which has taken nearly two years to get to the remedy stage. A majority of them apparently agree that splitting Microsoft into two businesses--applications and operating systems--will halt its illegal monopolistic practices. Presiding Federal Judge Thomas Penfield Jackson ruled on April 3 that Microsoft has violated federal and state antitrust laws.

Jackson also a Friday deadline for state and federal attorneys to suggest remedies for Microsoft's behavior. The parties may make separate suggestions, but Jackson urged them to present a united front.

Ohio Attorney General Betty Montgomery prefers to keep Microsoft intact, according to reports in the Washington Post. Montgomery may write a dissent, say unidentified sources quoted by the Post.

At least one other state attorney general may concur with Montgomery. But representatives of California, New York, Iowa, Connecticut and Wisconsin appear united behind the breakup plan, the Post says. California's attorney general had previously pushed to break Microsoft into three entities, but that idea appears to have been shelved.

Microsoft Exec Optimistic

Meanwhile, Microsoft Chief Executive Officer Steve Ballmer continues to call a corporate breakup "unbelievably irresponsible." He has used that term in several recent public appearances. Despite the government's expected proposal, Ballmer has said repeatedly that he is confident Microsoft will not be divested.

"I don't think American and worldwide consumers will be well served by any such action," Ballmer told CNBC on Thursday. "America is an incredible country that rewards people for innovation. Every company is supposed to do its best to innovate or service consumers."

Microsoft representatives have repeatedly said that they will appeal the ruling and expect to eventually prevail.

In the meantime, the potential effect of punishment is the subject of speculation among parties ranging from industry pundits to Microsoft's many customers.

"I think a breakup is a pretty farfetched outcome for the whole case," says Jeff Tarter, industry analyst and editor of Softletter. "The problem is the justice department got into the prosecution without a clear end game." Tarter expects the effect on consumers will be "negligible to nonexistent unless they happen to be shareholders in tech companies."

Breakup orders are rare in antitrust cases, except when a company became a monopoly illegally or through mergers, neither of which was the case with Microsoft, a New York Times analysis says.

A breakup would be "somewhat of a stretch," William Kovacic, a professor at George Washington University Law School, told the Times. But, he notes, "The breakup that has been suggested is consistent with the broad and flexible historical legal standard in antitrust."

Margret Johnston, IDG News Service and Cameron Crouch, PC World contributed to this report.

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