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What if Microsoft loses the antitrust case?

Justice Department quietly considers potential remedies

February 19, 1999
Web posted at: 1:07 p.m. EST (1807 GMT)

by Bob Trott


Antitrust litigation


What do you think will happen to Microsoft if it loses the antitrust case?

It will
be broken up
It will
be forced to
license its Windows code
Something less dramatic
View Results


(IDG) -- The U.S. Department of Justice is mulling over potential remedies to propose if it wins its antitrust case against Microsoft -- a prospect that seems more likely with each passing Microsoft courtroom blunder.

A source familiar with the prosecutors confirmed reports that Justice Department officials have recently stepped up talks about remedies they may propose should they prove their case in the eyes of U.S. District Judge Thomas Penfield Jackson.

No decisions have been made, but two dramatic proposals are being considered: Breaking the software giant into two or three separate companies, and forcing it to license its Windows code. Or, the Justice Department may propose some less drastic remedies.

One legal antitrust expert said while it is understandable that the government would not want to discuss remedies with the trial still proceeding -- Microsoft is presenting its defense -- it is reasonable that prosecutors are preparing for the remedy phase of the trial.

"There is a long tendency, going back through the history of Sherman [Antitrust] Act cases, for the remedy to be too much of an afterthought," said William Kovacic, a law professor at the George Mason School of Law, in Washington, D.C. "The tendency is to think that the crucial battle is to win on liability, to show there's been a violation. The danger in doing it that way is you don't devote nearly enough attention to deciding what it is you want to accomplish when the judge says you win."

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Another potential fix could be to order Microsoft to end predatory business practices defined by the government--such as its Internet service provider contracts, which many view as exclusionary. However, that was the intent of the 1995 consent decree Microsoft signed with the Justice Department and is viewed as largely ineffective.

Department of Justice officials had no comment.

Must be ready

If Jackson does rule against Microsoft, he'll expect the government to have recommended remedies in hand for consideration. But Microsoft would likely appeal an unfavorable ruling immediately, which could postpone any decision on remedies.

"The judge is likely to tell Microsoft that they can appeal the entire package [a verdict and remedies]," Kovacic said. "There will be no remedies put in place during the appellate process."

One industry organization, the Association for Competitive Technology, argues it is far too early for the Justice Department to discuss what happens if it wins the trial.

ACT -- a Microsoft ally that counts the defendant among its hundreds of dues-paying members -- Tuesday released a survey of 408 IT executives. The survey's message was that the government should keep its hands off of the industry.

ACT's survey found 63 percent opposed a Microsoft breakup; 67 percent opposed forcing Microsoft to open up Windows to licensing; and 72 percent opposed the forced inclusion of competing companies' software in Windows. The survey was done one month ago by for ACT by the Washington, D.C., firm Mason-Dixon Political/Media Research.

"People like standards, and we've chosen Windows to be our standard," said Ted Johnson, executive vice president of Visio and an ACT board member. "It's a stable platform on which we all rely. It is not really a surprise to me that UNIX never really took off."

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U.S. vs Microsoft: Justice Department case information
U.S. vs Microsoft: Microsoft Corporation's trial update
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