Government Could Seek Immediate Restrictions on MS

WASHINGTON (04/24/2000) - The government and 19 states this week may seek some immediate restrictions on Microsoft Corp.'s behavior, as part of any remedy proposal in the ongoing antitrust action, say legal experts.

Several published reports today suggested that U.S. Department of Justice officials were prepared to seek a breakup of Microsoft. The government must file by Friday a remedy recommendation in response to Judge Thomas Penfield Jackson's recent ruling that Microsoft violated antitrust law.

Microsoft stock was down about 16 percent in midmorning trading today, to $66.03 per share.

"It's a sound strategy to demand more then you may realistically expect," said Hillard Sterling, an attorney at Gordon & Glickson PC in Chicago Sterling. "A breakup request at least will focus Judge Jackson on the need for significant relief - something on which all the plaintiffs appear to agree."

But whether a breakup order by Jackson is ultimately imposed will depend on how well Microsoft does on appeal, according to analysts.

"If, during the appeals, Microsoft succeeds in overturning important elements of Judge Jackson's conclusions of law, they will simultaneously weaken the foundation for a broad-based remedy," said William Kovacic, a law professor at George Washington University in Washington.

In any event, no irreversible remedy - such as a breakup - would be imposed until all appeals are exhausted, said legal experts.

Kovacic said he believes that the government will offer a package of short- and long-term remedies this week.

A short-term remedy, until a breakup is finalized, could include restrictions on what Microsoft can bundle with its operating system.

But Sterling said it's also possible that the government may forgo seeking interim penalties against Microsoft to safeguard its case from a possible appellate court setback. Interim remedies would face immediate review by an appeals court, which rejected an earlier injunction against Microsoft. In a 1998 ruling, an appeals court lifted an injunction imposed by Jackson which forbade Microsoft from insisting that computer resellers bundle its Web browser with Windows.

Jackson is interested in sending this case directly to the Supreme Court, something the government may also favor.

Interim relief also faces "more stringent standards then normal relief; to get interim injunctive relief, plaintiffs must show a substantial likelihood of ultimate success," said Sterling.

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