Government remedies due Friday

By Margret Johnston
IDG News Service, 04/27/00

WASHINGTON - The Department of Justice on Friday is expected to formally ask for a breakup of Microsoft, but there might be some dissenters among the 19 states that are also suing the software giant.

While a majority of the states in the case apparently agree with splitting Microsoft into two businesses, Ohio Attorney General Betty Montgomery prefers to keep the company intact, the Washington Post reported Thursday. Montgomery is considering writing a dissent, according to unidentified sources quoted by the Post.

At least one other state attorney general might join Montgomery, who believes a breakup goes too far. But California, New York, Iowa, Connecticut and Wisconsin appear to be mostly united behind the breakup plan, the Post said. California's attorney general previously pushed to break Microsoft into three entities, but that idea appears to have been shunted.

Meanwhile, Microsoft CEO Steve Ballmer commented on the idea of breaking up the company in a television interview, reiterating his contention that such a move would be "unbelievably irresponsible." Despite the government's expected proposed remedy, Ballmer told CNBC he felt confident the company would not be broken into parts. "I don't think American and worldwide consumers will be well served by any such action," Ballmer said. "America is an incredible country that rewards people for innovation; every company is supposed to do its best to innovate or service consumers."

Tomorrow is the deadline for the Justice Department, 19 states and the District of Columbia to announce how they propose to punish Microsoft for having an illegal monopoly. The schedule for the "remedy phase" of the antitrust action was set by U.S. District Judge Thomas Penfield Jackson, who is presiding over the case. This phase of the trial follows Jackson's conclusions of law, issued April 3, in which he determined that Microsoft had violated federal and state antitrust laws.

Breakup orders have been rare in previous antitrust cases, except when a company became a monopoly illegally or through mergers, neither of which was the case with Microsoft, a New York Times analysis said Thursday.

But William Kovacic, a professor at George Washington University Law School, told the Times that "the breakup that has been suggested is consistent with the broad and flexible historical legal standard in antitrust."