Gates avoids order to split

Associated Press

WASHINGTON — In a dramatic shift, the Bush administration on Thursday abandoned the Clinton-era effort to break up Microsoft. It suggested a lesser antitrust penalty that could still force changes to the company’s new Windows operating system.

The Justice Department also dropped charges that the software giant illegally hurt competitors by tying or bundling separate features, such as a Web browser, to its flagship computer operating system.

Microsoft had hotly contested those charges because the company’s strategy calls for integrating more new features into products such as the new Windows XP operating system, due in stores next month.

Officials said the legal shift was not an overture to Microsoft to settle. They suggested the government will ask the new judge handling the antitrust case to review the Windows XP software and seek a penalty that ensures the company doesn’t operate as an illegal monopoly in the future.

But the news that reverberated from Wall Street to Silicon Valley was the decision to stop trying to break up an American corporate icon that helped fuel the technology revolution of the 1990s.

The 19 states that joined the government in suing Microsoft and seeking its breakup acquiesced, saying an appeals court decision earlier this summer would make a breakup more difficult to pursue.

"This is an industry that moves incredibly fast," said Iowa Attorney General Tom Miller. "The case has gone on for quite some time now. It was time to move as quickly as we could to remedy."

Microsoft reacted with cautious optimism. "We remain committed to resolving the remaining issues in the case," spokesman Vivek Varma said.

Investors, however, showed some concern that the penalties the Bush administration will seek might still affect or delay next month’s planned debut of Windows XP — which many on Wall Street hope will help invigorate the sluggish technology industry.

Microsoft shares finished the day down $1.72 at $56.02 per share.

Justice said it made the about-face to streamline the case and bring it to an end as quickly as possible. The goal, it said, was to "obtain prompt, effective and certain relief for consumers."

The department said it still would seek a penalty that would open the operating system market to competition.

To that end, the government proposed a penalty similar to some interim penalties imposed by the original trial judge, U.S. District Judge Thomas Penfield Jackson.

Those would, among other things, stop Microsoft from making certain exclusive deals with partners, force computer manufacturers to keep specific icons and programs on the Windows computer desktop, and give other companies more access to Windows blueprints.

Howard University law professor Andy Gavil said such restrictions could affect Windows XP, which has been completed by programmers but won’t reach stores until October.

"It’s hard to square the interim remedy with Windows XP," Gavil said.

One of Microsoft’s chief rivals said it was happy the government plans to focus on the new systems.

"What’s clear today is that the Department of Justice is prepared to take a hard look at Windows XP and will pursue a quickly imposed remedy to open up competition on the desktop," AOL Time Warner executive John Buckley said.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

More in Local News

Two snowboarders head up the mountain in a lift chair on the opening day of ski season at Stevens Pass Ski Area on Friday, Dec. 2, 2022, near Skykomish, Washington. (Ryan Berry / The Herald)
Ski season delayed at Stevens Pass due to minimal snow

Resort originally planned to open Dec. 1. But staff are hopeful this week’s snow will allow guests to hit the slopes soon.

Siblings Qingyun, left, and Ruoyun Li, 12 and 13, respectively, are together on campus at Everett Community College on Thursday, Oct. 19, 2023, in Everett, Washington. The two are taking a full course load at the community college this semester. (Ryan Berry / The Herald)
Siblings, age 12 and 13, are youngest students at EvCC campus

Qingyun Li was 11 when he scored a perfect 36 on the ACT test. His sister, Ruoyun, was one point away.

Edmond’s newly elected mayor Mike Rosen on Wednesday, Nov. 15, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)
Mayor-elect Rosen wants to ‘make Edmonds politics boring again’

Mike Rosen handily defeated incumbent Mayor Mike Nelson. He talked with The Herald about how he wants to gather the “full input” of residents.

A speed camera facing west along 220th Street Southwest on Tuesday, Nov. 21, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)
Traffic cameras, and tickets, come to Edmonds; Mukilteo could be next

New school zone cameras in Edmonds will begin operating in January. Mukilteo is considering enforcement cameras as well.

A person walks their dog along a flooded Old Snohomish Monroe Road on Tuesday, Nov. 16, 2021 in Snohomish, Washington. (Olivia Vanni / The Herald)
Flood-resistant floors and sandbags are price of riverside life in Sultan

Flooding is a threat every year for 75,000 locals — and the long-term forecast suggests it’ll only get worse in the coming decades.

Everett Community College is introducing a new Trojan design as the college's symbol of student spirit and athletics. The design incorporates the Feather Star, EvCC's official logo, in the Trojan's cape.  (Dan Bates / The Herald)
Amid staffing crisis, student nurses run into shortages in education too

Everett Community College’s nursing program has 79 slots. Hundreds apply each year — and that’s just the first hurdle.

A family walks through the Wintertide lights Thursday, Dec. 1, 2022, at Legion Park in Everett, Washington. (Ryan Berry / The Herald)
Wintertide Lights returns for the month of December in Everett

The free family event is open nightly at Evergreen Arboretum and Gardens in Legion Park.

Lynnwood Mayor Christine Frizzell speaks during a ribbon cutting ceremony to celebrate the completion of the 196th ST SW Improvement Project near the 196th and 44th Ave West intersection in Lynnwood, Washington on Tuesday, Aug. 15, 2023. (Annie Barker / The Herald)
Jarred by anti-Semitic rants, Lynnwood council approves tax increase

Three people spewed hate speech via Zoom at a council meeting this week. Then, the council moved on to regular business.

From the patrol car footage of Everett police officer Ryan Greely, Molly Wright sits in the back of a police car after being arrested for obstructing a law enforcement officer on Aug. 10, 2023 in Everett, Washington. (Screenshot from a video provided by Molly Wright)
‘My rights were violated’: Everett officer arrests woman filming him

Ryan Greely arrested Molly Wright in August on charges of obstructing, though state law generally allows filming police in public.

The Days Inn on Everett Mall Way, which Snohomish County is set to purchase and convert into emergency housing, is seen Monday, Aug. 8, 2022, in Everett, Washington. (Ryan Berry / The Herald)
Over $130M for affordable housing set to be approved by County Council

The five-year investment plan of the 0.1% sales tax aims to construct 550 new affordable units.

Man killed in Highway 99 crash near Lynnwood identified

Brian Paulin, 32, lost control while driving on Lincoln Way and Highway 99.

The county canvassing board certifies election results at the Snohomish County Auditor’s Office in Everett, Washington on Tuesday, Nov. 28, 2023.  (Annie Barker / The Herald)
General election results stamped official by canvassing board

In Snohomish County, one hand recount will take place. Officials said ballot challenges were down this year.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.