Reversing a Clinton-era goal, the U.S. Justice Department said Thursday it would not seek a breakup of Microsoft in its long-standing antitrust battle with the software giant. The department said it was giving up that chase in an "effort to obtain prompt, effective and certain relief for consumers."
The DOJ also said it would not pursue a key software-tying claim, which alleges that Microsoft illegally bundled its Internet Explorer browser software with its Windows operating system, when proceedings in the case resume later this month before U.S. District Judge Colleen Kollar-Kotelly.
Instead, the DOJ said it will seek a remedy "modeled after the interim conduct-related provisions of the final judgment previously ordered in the case," a ruling issued by U.S. District Judge Thomas Penfield Jackson in June 2000.
The about-face could lay the groundwork for a swift settlement of the case, although the DOJ said it could pursue additional remedies, suggesting it might look into issues surrounding Windows XP, Microsoft’s soon-to-be released PC operating system.
"The Department will ask the court for a period of expedited discovery to investigate developments in the industry since the trial concluded, and to evaluate whether additional conduct-related provisions are necessary, especially in the absence of a break-up," the DOJ said in a press release. "The Department is seeking to streamline the case with the goal of securing an effective remedy as quickly as possible."
Microsoft could not be reached for comment, but a company spokesman told Reuters that company officials "remain committed to resolving the remaining issues in this case."
The original "conduct-related" remedies would ban Microsoft from bullying PC makers into adopting Microsoft software at the expense of rival products and would force Microsoft to license its key Windows operating system on the same terms to all PC makers, giving them the option to alter the "boot-up" sequence. Microsoft would also be required to give third-party software developers greater access to the Windows code.
Connecticut Attorney General Richard Blumenthal, one of the leaders of the 19 states who joined the DOJ in the antitrust case, said in a statement that he agreed with the DOJ’s decision.
"We concur with the Department of Justice in today's announcement. This decision, while difficult, was driven by a realistic, clear-sighted view of the clock. The result needs to be right but prompt, and this course seems the best realistic strategy to secure a remedy that is timely, effective, and certain. We look forward to pursuing other available and appropriate remedies as soon as practicable."
Blumenthal noted that Thursday’s decision was strongly influenced by a June ruling of the U.S. Court of Appeals, which overturned both Jackson’s breakup order and his ruling on the tying claim, and sent the case back to the District Court.
"The Court of Appeals opinion sent a strong message about the likely judicial view of breaking up the company as a remedy - a view that we would ignore at our peril. We may not agree with the Court of Appeals on breakup or tying, but it has set a standard that would mean protracted proceedings and delayed relief with a highly uncertain result."
In its June decision, the Court of Appeals upheld Jackson’s ruling that Microsoft has a monopoly in the market for PC operating systems and that it used illegal tactics to defend that monopoly.
Kollar-Kotelly is scheduled to hold hearings with Microsoft, the DOJ and the state attorneys general on Sept. 21 to decide what sanctions to impose on Microsoft. She was selected to oversee the case after the Court of Appeals disqualified Jackson for commenting on the case to the media.
"This is an unqualified victory for Microsoft," said Rich Gray, a Silicon Valley attorney who has watched the antitrust case since its inception. "They have taken their two biggest clubs off the table for a settlement negotiation."
Gray also said that by removing the tying claim, the government has limited the types of remedies it could hope to get. Microsoft has insisted all
