|
Microsoft case extended
|
 |
June 1, 2000: 6:08 p.m. ET
Judge grants extension to both sides to file additional comments
|
NEW YORK (CNNfn) - In a surprise move, the judge presiding over the Microsoft antitrust case gave both sides more time to file additional comments before he issues a ruling that could call for a breakup of the software company.
Trial watchers were expecting Judge Thomas Penfield Jackson to issue a final ruling as early as Friday. However, the judge decided to grant the Justice Department time to respond to a filing Microsoft made Wednesday that contained a series of suggested revisions to Justice's proposal to split the software giant in two.
 "We requested the opportunity to analyze those suggestions, and there may be a few that are acceptable to us," said Joel Klein, Justice's lead antitrust enforcer, at an unrelated conference in New York.
Under a scheduling order Judge Jackson issued Thursday following a conference call with attorneys from both sides, Justice has until the morning of June 5 to respond to Microsoft's latest filing. Microsoft has until the morning of June 7 to reply to the government's new filing, if it chooses to do so.
|
|
VIDEO
|
|
CNNfn's Peter Viles reports on possible breakup of Microsoft.
|
|
Real
|
28K
|
80K
|
|
Windows Media
|
28K
|
80K
|
|
Microsoft (MSFT: Research, Estimates) made it clear Thursday that the extension in the case was made at the government's request, not the company's.
"The government asked for the conference call in order to get more time," said Microsoft spokesman Jim Cullinan. "The government wants more time because they realize how vague, ambiguous, and poorly written their proposal is after reading our filing yesterday."
Grounded in reality
The filing Microsoft made Wednesday contained 39 pages of line-by-line suggested revisions to the government's previous proposal to break up the company and impose a series of restrictions on its business conduct. Both the breakup proposal and the so-called "conduct remedies" are designed to prevent Microsoft from violating antitrust laws in the future.
Microsoft stipulated in Wednesday's filing that its changes don't reflect any agreement with the government's plan or the withdrawal of objections that the company has previously filed with the court.
"This does not change the fact that this remedy is harmful and damaging to consumers, the industry and our economy," Microsoft's Cullinan said Thursday.
Microsoft's filing this week was significant because it represented the first time that the company has given detailed commentary on the mechanics of the proposed breakup. In a filing made on May 10, Microsoft called the government's proposal extreme, radical, and unwarranted and described why the judges conclusions of law don't justify such a remedy.
"Microsoft's filing yesterday was the first time that the company has ever seriously considered the possibility that it might lose," said Robert Lande, a professor at the Baltimore School of Law. "It's the first time in the history of this case that they are actually grounded in reality."
Microsoft's detailed revisions
The series of revisions Microsoft suggested appear to be realistic enough for the government to give them serious consideration. One of the most significant changes Microsoft suggested was increasing the time it would have to submit a breakup plan after the entry of a final judgment to 12 months from the government's four months.
"The forced breakup of a unitary company like Microsoft is unprecedented, and dividing the company in half would be an enormously difficult task," the company's filing said. "Four months is not remotely enough time to formulate a plan for attempting such an undertaking."
Microsoft's revisions also stated that it is vital for the government to define the term "Internet browser" because the government has proposed to limit the ability of a split-off operating systems business to develop or distribute modified versions of Microsoft's browser software.
In addition, the software maker wants to revise the government's proposal that it treat computer makers equally and that it publish the pricing for Windows on its Web site. The company said that the largest PC maker that would be covered by the government's plan does 40 times the annual unit volume as the smallest one, making equal treatment of all PC companies unfair to the larger companies. If Microsoft sets its pricing for Windows using objective criteria, there is no reason to force the company to publicly disclose its pricing schedule, the company said.
Goldman Sachs, Janet Reno comment
Dan Wall, an antitrust lawyer in San Francisco, said that while Microsoft could benefit from the opportunity for additional comments, "it's really a Band-Aid on a much larger problem." (Click [WAV 170KB] or [AIF 170KB] to listen to Wall's comments.)
In a research report, Goldman Sachs analyst Rick Sherlund said the strong arguments in Microsoft's appeal "might put a somewhat more favorable spin on the news and give investors some more tangible basis for optimism."
"Our view is that the near-term news will be negative, but may be followed by a more tranquil period while the case is out for appeal for perhaps a year or more," he added.
Attorney General Janet Reno, meanwhile, took a few shots at Microsoft at her weekly press conference Thursday.
"America was not made the industrial giant of the world by the robber barons alone," Reno told her weekly press conference. "It was made the industrial giant of the world by competition, by encouraging new developments, by encouraging young entrepreneurs to break into the market. It's the best system I've seen so far."
Reno was asked why the Justice Department has bought tens of thousands of PCs running Windows, rather than ones with other operating systems.
"I don't think you endorse something by purchasing it if it's the only game in town ... in terms of an effective machine, and the lowest price available," Reno replied.
Shares of the Redmond, Wash.-based company climbed 2, or 3.2 percent, to close at 64-9/16 Thursday on the Nasdaq. 
|
|
|
|
|
 |
|
