Microsoft may have a greater say in antitrust case after no-breakup ruling

Associated Press

WASHINGTON — The same business changes the Justice Department may soon try to impose on Microsoft were proposed by the software maker last year as an alternative to the Clinton administration’s breakup plan.

Considering the Bush administration’s decision this week not to pursue a breakup, however, legal experts predict the company now will take a harder line. Microsoft won’t say what it would accept to end the four-year antitrust case.

Dana Hayter, a former Justice Department lawyer now in private practice, said he was skeptical of remedies suggested by the Redmond company.

"If a remedy has been proposed by Microsoft, they’ve already figured a way around it," Hayter said.

Before U.S. District Judge Thomas Penfield Jackson ordered the company broken in two last year, Microsoft offered in both public court papers and settlement negotiations to accept many of changes the government indicated this week it will seek.

Those include letting both computer manufacturers and buyers add and remove Windows icons and programs, giving software designers access to Windows code and stopping exclusive deals that promote only Microsoft products.

Later, when Jackson imposed the changes as part of his breakup order, Microsoft President Steve Ballmer called them "Draconian regulations."

The remedies would conflict with the soon-to-be-released Windows XP operating system and require major monitoring by the government, which experts said Microsoft would not tolerate willingly.

" (Jackson’s) conduct remedies would have killed Windows XP in its tracks," said Norm Hawker, a law professor at Western Michigan University. "Conduct remedies would mean the government would oversee Microsoft’s business on a day-to-day basis."

In an announcement Friday, the attorneys general of New York and California said they would make sure that Windows XP receives "close scrutiny in arriving at a judicially ordered remedy."

When the Justice Department announced Thursday it would no longer seek to bisect Microsoft, it suggested instead an order "modeled after the interim conduct-related provisions of the final judgment previously ordered" by Jackson.

Those provisions, which were quickly rescinded by Jackson once Microsoft appealed the case, would have required major changes in how Microsoft deals with customers and other companies and in the rights it has to its products.

University of Iowa law professor Herb Hovenkamp said remedies are available that would restore competition to the marketplace and deny Microsoft the fruits of its illegal behavior. He said they probably would involve giving other companies the right to sell stripped-down versions of Windows and changing the operating system to suit other markets.

"There is a huge market out there for operating systems that are faster, smaller and that have fewer features than the later versions of Windows," he said.

Hovenkamp said he doubts Microsoft would accede to such demands, because the company likely would "resist any set of remedies that affect Windows code," the program blueprint.

Microsoft consistently argues that customers demand the new features it provides. As to the company’s previous offers of conduct remedies or what it may now be willing to do to settle the case, Microsoft spokesman Jim Desler refused to comment.

Andy Gavil of Howard University said the government lost a prime bargaining chip when it said it would give up trying for a breakup. "Without the big stick of a breakup hanging over them, will they be as willing to give up as many things?" Gavil wondered.