Software company reaches into past

Microsoft says U.S. argued against split in earlier case

Anti-trust trial

May 23, 2000|By BLOOMBERG NEWS

WASHINGTON - Microsoft Corp. yesterday cited the U.S. Justice Department's 1995 opposition to competitors' proposals to break up the software giant as the company renewed a challenge to a similar government plan to split the company now.

In a court filing two days before company and government lawyers are to return to court in the landmark antitrust case, Microsoft lawyers recalled that the Justice Department, in a different case five years ago, opposed "essentially the same relief the government now seeks."The government has already admitted that the breakup of Microsoft `would be dangerous to the economy's welfare' and `against the public interest,' " the company said in its latest response to a government proposal to split the Windows operating system business from Microsoft's software applications.

U.S. District Judge Thomas Penfield Jackson, who found the company illegally protected its Windows monopoly on personal computer operating software, will hold a hearing tomorrow on the breakup proposal. Microsoft has sought a six-month delay in considering a breakup.

The company cited the history of a 1995 consent decree in its bid to persuade Jackson that the government proposal "was unwarranted and inappropriate."

Microsoft's legal brief was denounced by a government lawyer who said the company is relying on U.S. statements that predate company actions that Jackson determined were illegal. Microsoft's violations of antitrust law demonstrate why a breakup of the company is necessary to prevent future misconduct, the official said.

In 1995, a group of anonymous software industry companies challenged a consent decree that was negotiated between the Justice Department and Microsoft that barred the company from charging computer makers a fee for every personal computer they shipped even if it was not equipped with Windows.

In opposing the earlier breakup proposal, "the government had it right in 1995, the law does not countenance the dismemberment of Microsoft, a remedy that would clearly, `act against the public interest,' " Microsoft said.

At the time, the government was defending the consent decree it had negotiated with Microsoft. It argued that the court had no jurisdiction to question the wisdom of its decision to enter into the agreement, a position upheld by an appeals court. The anonymous software industry representatives made their breakup proposal in a hearing convened by a lower-court judge to consider public comments about the consent decree.

In a brief filed last week, the government said Microsoft's promises not to resume business practices it had already discontinued amounted to "a cosmetic remedy" that "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."

Among other things, Microsoft offered not to restrict the ability of computer markers to configure the desktop screen that users see when they first turn on their machines.

It also offered to hide the icon that users click to turn on Internet Explorer, the Web browser that Jackson says Microsoft bolted to Windows to foil competition from Netscape Communications Corp., now owned by America Online Inc. Microsoft said it would not resume the discontinued practice of barring Internet service providers from featuring Netscape Navigator or other rival software as a condition of being promoted on the Windows desktop.

Shares of Microsoft dropped 87.5 cents to $64.1875.

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