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Justice Dept. Rejects Microsoft Proposal

Courts: Filing says the firm's offer of self-imposed sanctions falls short; breakup still sought.

May 18, 2000|From Reuters

WASHINGTON — The government Wednesday rejected Microsoft Corp.'s offer to change its business practices, saying it would fail to stop the firm's violations of antitrust law, and defended its own proposal to break up the company.

"What remedy does Microsoft propose to undo the damage to competition caused by its past illegal conduct?" the government said in a 70-page brief filed in U.S. District Court. In the next sentence it answered its own question: "Nothing."

The filing came in response to Microsoft's offer last week to restrict its business conduct rather than be broken up by the court, which it said would be an extreme measure.

A Microsoft spokesman said the government's views were an unfortunate but not surprising attempt to defend an extreme proposal that would hurt consumers.

District Judge Thomas Penfield Jackson ruled April 3 that the software giant had broken U.S. antitrust law by abusing its monopoly in operating systems for personal computers. On April 28, the Justice Department and 17 states called for Microsoft to be split into a PC operating systems business and a separate applications software firm that would retain such assets as the Microsoft Office software suite and the Internet Explorer browser.

No matter what remedy the judge decides on, Microsoft says it always acted within the law and plans to appeal Jackson's findings.

"Microsoft attempts to elide the need for structural relief by pretending, contrary to the evidence at trial and this court's findings, that its conduct had no effect on competition," the strongly worded brief said. "Microsoft's proposed remedy is neither serious nor sensible."

"We don't believe there's any basis in the case for these kinds of excessive actions, which we believe would hurt consumers, the high tech industry and essentially the overall economy," said Microsoft spokesman Mark Murray.

The filing Wednesday was scheduled to be the last before Jackson conducts a hearing Wednesday to consider what remedies he should impose on Microsoft.

Last week, Microsoft asked the judge to issue a "summary judgment" that would dispose of the government's proposal to split the firm.

Microsoft said the problems found by Jackson could be addressed by allowing computer makers more freedom to alter the appearance of Windows, less restrictive marketing deals and not requiring software firms to limit distribution of software for use on non-Microsoft platforms.

If Jackson insisted on considering the breakup plan, Microsoft said further hearings should be delayed until December. That would give the two sides seven months to prepare for the remedies arguments, more than they had to prepare for the trial itself.

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