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U.S. Abandons Microsoft Break-Up Call
WASHINGTON, Sept 6 (News Agencies) - The U.S. government Thursday abandoned its demand for a break-up of software titan Microsoft Corporation to prevent illegal abuse of its power over the global industry.
"The Department of Justice's anti-trust division today advised Microsoft that it will not seek a break-up of the company in remand proceedings before the U.S. District Court," it said in a statement.
Government lawyers also dropped a complaint that Microsoft unfairly tied the Internet Explorer web browser into the Windows operating system, the Justice Department said.
"The department is seeking to streamline the case with the goal of securing an effective remedy as quickly as possible," it said.
The decision comes ahead of a September 21st court hearing before a new judge to decide on action against billionaire Bill Gates' software giant, which holds sway over the entire personal computer industry.
The apparent change of tactics under U.S. President George W. Bush's administration raised the prospect of a settlement in the three-year, four-month-long legal battle.
"The Department of Justice is signaling very strongly that they want to settle the case," New York University business school professor Nicholas Economides told Agence France-Presse (AFP).
"I would interpret this as saying that they want to get together with Microsoft to settle."
Justice Department prosecutors said instead of trying to break Microsoft apart, they would seek stringent restrictions on its business operations.
Pursuing the complaint over its Internet Explorer browser would only have prolonged the court proceedings and delayed the imposition of a solution that would help customers, they added.
"I do not view this as a retreat," said a Justice Department official, who asked not to be named.
The Department of Justice will not seek interim injunctions and has no plan to block Microsoft from releasing its latest Windows XP software October 25th, he added.
Eighteen U.S. states suing Microsoft joined the Department of Justice decision, which Microsoft answered by saying it was determined to settle the entire case.
"We remain committed to resolving the remaining issues of this case," Microsoft spokesman Jim Desler said.
The announcement failed to help Microsoft's shares, which fell $1.72 to $56.02, provoking widely divergent reactions.
"This company performed an illegal operation but they will not be shut down," complained Scott Harshbarger of the citizen lobbying group Common Cause, blaming the Bush administration.
The American Conservative Union (ACU) hailed the decision, however.
"The decade-long, multimillion-dollar, competitor-driven persecution of Microsoft is rapidly coming to a pertinent conclusion," said ACU chairman David Keene.
The Department of Justice announcement followed an order by the new trial judge, Colleen Kollar-Kotelly, for both sides to submit a joint status report by September 14th, a week ahead of her first hearing.
Judge Kollar-Kotelly was appointed to decide on remedial action after the U.S. appeals court in June upheld a lower court finding that Microsoft acted as an illegal monopoly but overturned a break-up order.
The appeals judges ruled the original District Court judge, Thomas Penfield Jackson, violated judicial ethics by discussing the case with journalists.
The U.S. government said it would ask the new judge for a quick investigation to check industry developments and to evaluate the need for further provisions, "especially in the absence of a break-up."
The Justice Department said it wanted to curb Microsoft with an order similar to Jackson's original decision governing its conduct, forcing Microsoft to reveal the software code of its operating systems and allow computer manufacturers to change the look of Windows on their PCs and set public pricing guidelines.
Microsoft complained at the time that such a course of action could be "devastating".
"This pretty much puts Silicon Valley companies back to where they started in their battle with Microsoft," said Emmett Stanton, an antitrust attorney with Fenwick and West in Palo Alto.
"Microsoft will remain the dominant player on the block and now everyone will have to deal with that."
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