UPDATE: MS Counters Remedy, Seeks Hearing Delay

BOSTON (05/10/2000) - Microsoft Corp. has proposed alternative behavioral remedies that it says will lead to greater competition in the operating system market, and has asked a federal judge to toss out the U.S. government's recommendation that the company be split in two.

Microsoft filed a motion for summary judgment regarding the breakup proposal, arguing that the findings in the case "do not justify the government's radical request to split Microsoft into two separate companies -- what the government euphemistically refers to as a simple 'reorganization,' " according to one of five documents filed in the case today. The company has also asked U.S.

District Court Judge Thomas Penfield Jackson to delay an evidentiary hearing on the matter -- scheduled for later this month -- until either August, October or December this year, depending on which proposals the judge decides to consider or reject.

The U.S. Department of Justice and 17 U.S. state attorneys general, all plaintiffs in the historic antitrust lawsuit against Microsoft, have recommended that Jackson order splitting the company in two, with one entity focused on operating systems and the other on applications. Two state attorneys general of Ohio and Illinois, also plaintiffs, filed a separate remedy proposal seeking only behavioral remedies.

Jackson has ruled in favor of the government that Microsoft has a monopoly on operating systems in the desktop PC market and has used that power in an attempt to make inroads into other markets, most notably Internet browser software, and to squelch competition. Before making a final ruling on remedies in the case, Jackson will also hold a hearing, during which the sides will have an opportunity to present their proposals orally.

Microsoft is expected to appeal the ruling.

Microsoft will conduct a press conference at 5 p.m. EDT to discuss today's court filing. Bill Neukom, Microsoft executive vice president for law and corporate affairs, will lead the press conference. U.S. media can call into the conference at +1-888-456-0324. International media can call +1-415-228-4647.

The passcode for both numbers is Microsoft.

The U.S. Department of Justice said it will not hold a press conference today regarding the Microsoft proposal.

Microsoft, in Redmond, Washington, can be reached at +1-425-882-8080 or http://www.microsoft.com/.

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