Microsoft not budging on antitrust case

Microsoft last Wednesday issued what the company thought would be its final response to the U.S. government's proposal to split the software titan into two separate companies, paving the way for District Court Judge Thomas Penfield Jackson to issue a final ruling in the case at any time.

But last Thursday, Jackson gave the U.S. Department of Justice and the states that have sued Microsoft for antitrust violations until today to file additional comments on Microsoft's latest brief.

Jackson said Microsoft would then have until June 7 to file a response to the government's comments.

In its court filing last week, Microsoft repeated its criticism that the government's proposal to break up the company is extreme and out of proportion to the judge's findings. The software vendor offered a detailed critique of the government's proposal, in which it addresses for the first time the logistical and economic realities that such a move would entail.

Highlighting the complexities of dividing a giant, global corporation that has subsidiaries in 75 countries, Microsoft asked Judge Jackson to grant it one year to submit a detailed proposal of the steps the company would take to divide itself in two. The Justice Department's proposal submitted last week allowed four months for Microsoft to pull such a plan together.

The company criticized what it referred to as a "glaring omission" in the Justice Department's breakup proposal - its failure to provide a clear definition of what constitutes an "Internet browser." The definition is crucial, Microsoft argued, because the government has asked the court to limit how the operating systems side of Microsoft's business can develop the product.

The filing also addressed government criticisms of Microsoft's last-minute "offer of proof" submitted last week, in which it listed evidence and witnesses (such as Compaq CEO Michael Capellas) that Microsoft would have presented had it been given more time to argue against the breakup.

The Justice Department last week called the submission "a cynical ploy calculated to raise diversionary issues on appeal," and criticized Microsoft for not submitting it earlier. Microsoft said the offer of proof had been prepared for use only if Judge Jackson chose to terminate the remedies phase of the trial without further hearings. No appropriate occasion had arisen earlier to submit the filing, the company added.

Jackson, in his final ruling, is anticipated to side with the government's request that Microsoft be broken up. Microsoft has vowed to appeal the decision, a process that could delay any structural changes for months or even years. The government has recommended that certain behavioral restrictions be applied in the meantime.

Niccolai is a senior editor with IDG News Service in San Francisco.