US Rejects Microsoft ‘Remedy’

Published May 18th, 2000 - 02:00 GMT

In a filing made Wednesday evening with a federal court in Washington, the Justice Department and 19 states strongly defended their proposal to break up Microsoft Corp. to prevent the software giant from violating antitrust laws, reported cnn.com 

The 70-page filing is the government's last effort to influence US District Judge Thomas Penfield Jackson before the judge holds a court hearing in the Microsoft antitrust case on May 24. The government is trying to convince Judge Jackson to split Microsoft into two separate companies, rather than adopting a much milder series of restrictions on business practices that Microsoft proposed to the court last week. 

“The Microsoft's proposal was nothing more than "a cosmetic remedy that would have virtually no competitive significance," the department said, quoted by AFP. 

"It would neither undo the harm that Microsoft inflicted on competition nor prevent Microsoft from illegally using its monopoly power to inflict similar harm in the future." 

It said "the proposed remedy is neither serious nor sensible" and reiterated its call for the software giant to be broken up. 

"What remedy does Microsoft propose to undo the damage to competition caused by its past illegal conduct? Nothing," the government said in its brief filed in US District Court. 

The department was responding to remedies submitted by Microsoft a week ago to Jackson, who on April 3 upheld government charges the company violated federal law by exploiting the monopoly position its Windows operating system enjoys in the personal computer market to stifle competition. 

Judge Jackson also found that Microsoft had illegally sought to dominate the market for Internet browsers. 

The government on April 28 responded by calling on the court to split Microsoft into two entities, one to develop and market personal computer operating systems and another to specialize in software applications. 

In last week's filing to the court, Microsoft denounced the breakup proposal and asked Jackson to dismiss it. The company instead outlined a series of restrictions on some of its business practices that it said would correct the violations the court had found. 

The government on Wednesday replied to the Microsoft plan by asking: "What remedy does Microsoft propose to undo the damage to competition caused by its past illegal conduct?" 

Answering its own question, the department replied: "Nothing." 

It said the proposed remedy would still allow Microsoft to bind together "two separate products without any technological justification and for the express purpose of suppressing competition on the merits." 

Accirding to AFP, the government accused the company of bundling its Internet browser Explorer into the market-dominant Windows platform, used in nine of every 10 personal computers worldwide, in order to discourage customers from choosing a rival browser offered by Netscape. 

The Justice Department also maintained that the restrictions Microsoft agreed to accept on its business conduct would leave it free to continue punishing computer makers who distribute rival software or who refuse to distribute Microsoft products. 

The government again urged the court to accept its breakup recommendation, which it said would "leave Microsoft's assets intact but restructure them so as to remove the incentives that Microsoft now has to use those assets in anti-competitive ways to protect its operating system monopoly." 

In addition, it said, the scheme would undo the harm to competition Microsoft had committed "without creating the costly inefficiencies of more burdensome regulation." 

The Justice Department also dismissed a request by Microsoft for additional time to prepare its case against the government's proposal as "a transparent effort to delay the determination and implementation of a remedy for its illegal acts as long as possible." (Several Sources) 

 

© 2000 Al Bawaba (www.albawaba.com)

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