Microsoft: Dismiss Gov't Plan

by Eun-Kyung Kim, AP Writer
May 10, 2000, 9:18 pm GMT

WASHINGTON (AP) - Microsoft Corp. (NasdaqNM:MSFT - news) asked a federal judge today to throw out the Justice Department's plan to break up the software giant, saying the penalty would far exceed the antitrust violations the judge found the company to have committed.

Microsoft offered its own remedies to correct what U.S. District Judge Thomas Penfield Jackson ruled last month was illegal anticompetitive behavior.

The company said it was willing to stop displaying the desktop icon in its Windows operating system that leads users to its Web browser, Internet Explorer. In addition, the company would allow computer makers to prominently feature any software, including from Microsoft rivals, on the Windows desktop.

The Justice Department and 17 state attorneys general asked the judge April 28 to break the company into two parts - one company to develop and market the Windows operating system and the other to develop Microsoft's other software and Internet holdings, including the Microsoft Office suite of programs.

In its filing today, Microsoft also said that it would be willing to offer equal contracts to computer makers, regardless of whether they agreed to support competitors' software. It would also provide equal access to technology that would allow any software maker, including the company's competitors, to easily write programs for Windows.

In Jackson's April 3 ruling, Microsoft was found to be a monopoly that illegally stunted innovation and harmed consumers in violation of federal antitrust law.

The government's breakup proposal was intended as a remedy.

Microsoft maintains its aggressive practices were nothing more than competitive behavior and insists it did nothing wrong. Under Jackson's orders, however, it submitted its own proposed remedies.

Microsoft, in its filing, also suggested various timetables for moving forward with the case.

The lengthiest scenario has proceedings lasting until December. If Jackson finds in Microsoft's favor on nearly every point, however, the case could be wrapped up in August.

Any remedy proposal, regardless of how modest the relief, would be to Microsoft's advantage in the eyes of the court, a legal observer said.

``Microsoft has some concerns that they not appear arrogant or unwilling to address the issue. If they simply go before Judge Jackson and say, 'No remedy is appropriate,' then there's a greater likelihood that Jackson would write off their position as unreasonable,'' said Warren Grimes, an antitrust expert at Southwestern University School of Law in Los Angeles. ``I think by coming in and saying, 'Here's what's appropriate,' they give the judge and the government something to focus on.''

The government has until May 17 to counter Microsoft's response, and Jackson has scheduled a May 24 hearing to consider the issue. Microsoft has made it clear, however, that it needs more time to gather depositions and evidence to combat the government's proposal.

Even if the government's plan is eventually accepted by Jackson, it is unlikely to implemented for years because of challenges it faces on appeal.