DOJ Calls Off Microsoft Break-Up Effort

In what it called “steps in an effort to obtain prompt, effective and certain relief for consumers,” the U.S. Department of Justice
Thursday announced it will no longer seek a break-up of Microsoft Corp. — as originally ordered by Judge Thomas
Penfield Jackson of the U.S. Circuit Court for the District of Columbia — and will no longer pursue the tying count in the original
complaint.

In June, the U.S. Court of Appeals for the District of Columbia invalidated Judge Jackson’s ruling that the company be
split into separate operating system and applications companies, citing improper conduct by Judge Jackson during the trial. The
court also reversed and remanded Judge Jackson’s finding that the company had illegally tied its Internet Explorer Web browser to
its operating system. However, the Appeals Court upheld Judge Jackson’s ruling that Microsoft had illegally maintained a monopoly.

The Appeals Court last month returned the case to the lower court under a new judge, Colleen Kollar-Kotelly. Judge Kollar-Kotelly
followed through by ordering both Microsoft and the DOJ to produce a joint status report by Sept. 14. That date apparently motivated
the government to drop its pursuit of a break-up and the tying claim.

“The [Antitrust] Division advised Microsoft of its position on the tying claim and the issue of structural relief to facilitate
consultations on the joint report,” the DOJ said in a statement Thursday.

The DOJ added, “In view of the Court of Appeals’ unanimous decision that Microsoft illegally maintained its monopoly over PC-based
operating systems — the core allegation in the case — the department believes that it has established a basis for relief that
would end Microsoft’s unlawful conduct, prevent its recurrence and open the operating system market to competition. Pursuing a
liability determination on the tying claim would only prolong proceedings and delay the imposition of relief that would benefit
consumers.”

The DOJ said it will ask the court for a period of expedited discovery to investigate developments in the industry since the trial
concluded and whether additional conduct-related provisions are needed.

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