Pro-Microsoft Group Decries DOJ Breakup Plan

A pro-Microsoft Corp. lobbying group filed a proposal today calling on U.S. District Judge Thomas Penfield Jackson to reject the U.S. government's suggestion that he break up Microsoft in order to "remedy" the software giant's multiple violations of federal and state antitrust law.

The Association for Competitive Technology (ACT) said the government's April 28 proposal to split Microsoft into an operating systems company and a software applications company would harm both consumers and other software developers "as much or more than Microsoft." The group urged Jackson to seek testimony from software developers before making his final ruling.

In its May 10 response to the government, Microsoft labeled the breakup proposal an unnecessarily radical departure from basic antitrust law and proposed a set of relatively mild restrictions on some of its business practices. Should Jackson decide to officially consider the government's breakup proposal, Microsoft's lawyers said they will ask for several months' worth of unspecified new-evidence discovery, depositions and courtroom-witness testimony.

In January, ACT filed an official brief supporting Microsoft's "proposed conclusions of law" in the case. From the looks of Jackson's April 3 conclusions, ACT's prior brief didn't have too much effect -- Jackson found that Microsoft repeatedly violated the Sherman Antitrust Act and various state antitrust statutes by bullying the software industry into illegally preserving its dominant Windows market share. It's not clear whether Jackson will formally accept today's unsolicited brief, a refreshingly slender document accompanied by several short, supporting declarations.

Jackson has, however, signaled a willingness to consider unsolicited opinions by accepting another brief filed by representatives of Harvard, Yale, Stanford and the Brookings Institution. That brief called for breaking Microsoft into four companies -- three operating systems company clones and one company for all of Microsoft's other products.

"So far, this case has been a battle between the titans," ACT President Jonathan Zuck said in a statement. "It's high time that all get a sense of the impact the government's extreme proposal would have on those getting caught in the crossfire -- the tech entrepreneurs."

According to the ACT brief, the government breakup proposal announced 18 days ago has already created a damaging sense of uncertainty in the software industry, even though it's far from clear that Jackson will order a breakup.

Jim Tyson, chief executive officer of Active Designs, told Jackson that his customers already are fleeing from Microsoft's products.

"The Justice Department's actions toward Microsoft have had a noticeable chilling effect on our customers -- some of them are now anxious about, or even are opposed to, the use of Microsoft platforms and tools for their software applications," Tyson said in a supporting declaration.

Tomorrow, the government will respond to Microsoft's counter-proposal, likely reiterating its call for a breakup and instructing Jackson to allow Microsoft a limited amount of time and new legal tools to renew its defense. Jackson has scheduled a courtroom hearing on the trial's remedy phase for May 24.

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