Judge Heavily Regulates Microsoft's Behavior

WASHINGTON (06/07/2000) - A federal judge today ruled that Microsoft Corp. should be broken into two companies and heavily regulated to stop the software company's anticompetitive behavior.

The ruling by U.S. District Court Judge Thomas Penfield Jackson ends one phase of the historic antitrust case -- and begins another. Microsoft is expected to immediately appeal the decision, a process that could take a year or two.

Jackson apparently accepted the government's recommendation for a breakup with little or no change.

"The court's order is the right remedy for Microsoft's serious and repeated violations of antitrust laws," said Joel Klein, assistant U.S. attorney general for antitrust, in a statement.

Jackson ruled on April 3 that Microsoft violated federal antitrust law by abusing its monopoly position in the PC operating systems market. The U.S.

Department of Justice and 17 states recommended a remedy that would regulate Microsoft's conduct with PC vendors and split Microsoft into a Windows business and an applications software business.

The two sides squabbled this week about the details of the government's proposed remedy. Microsoft said it was too harsh, with unrealistic deadlines, onerous rules and "unintelligible" language. The Justice Department maintained the remedy is needed to restrain Microsoft's aggressive efforts to thwart competition.

In today's opinion, Jackson dismissed Microsoft's contention that a forced divestiture is "draconian" and required more evidence and hearings. He wrote that Microsoft should have known that a breakup was a possibility and he curtly ruled: "There will be no more proceedings."

The judge continued: "The court is convinced for several reasons that a final -- and appealable -- judgment should be entered quickly. It has also reluctantly come to the conclusion, for the same reasons, that a structural remedy has become imperative: Microsoft as it is presently organized and led is unwilling to accept the notion that it broke the law or accede to an order amending its conduct."

Today's decision is available at the U.S. Government Printing Office's Web site.

Patrick Thibodeau contributed to this report.

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