Article 111 of 200
Judge suggests 3 Microsofts
A federal judge in Washington hinted yesterday that he likes a
proposal for breaking Microsoft Corp. into three separate firms, not
the two recommended by Justice Department trustbusters. But economic
and legal experts say such a move could jack up the price of personal
Government antitrust lawyers have proposed breaking Microsoft into
a computer operating systems company and one that makes and markets
all of Microsoft's other products, from word processing and
spreadsheet programs to Internet applications. Microsoft argues that
plan would hurt shareholders and consumers and retard technological
Yesterday, U.S. District Judge Thomas Penfield Jackson asked
government lawyers about an alternative breakup plan that would also
divide the nonoperating systems firm into one for PC programs and
another for Microsoft's Internet Explorer Web browser.
Jackson ruled last month that Microsoft broke antitrust laws to
guard its PC operating systems monopoly, but yesterday he questioned
whether splitting Microsoft into just two companies would suffice or
merely create a pair of monopolies with little benefit to consumers.
Massachusetts is one of 17 states supporting the Justice
Department breakup proposal.
Outside observers panned the idea of carving a third Internet firm
out of the Redmond, Wash., software giant. Nicholas Economides , who
teaches economics at New York University's Stern School, said the
idea "seems like an unfeasible solution."
"Microsoft Explorer is given away for free. An Internet Explorer
company would have to charge customers. That would mean everyone
would pay $40 or $50 more to get access to the Internet," he said.
Jackson gave government trustbusters until tomorrow to update
"Nobody thinks that a browser company on its own makes any sense,"
said Rick Rule, a former Justice Department antitrust chief who is a
Economides also suggested that Jackson should give Microsoft more
time to respond to the breakup plan, or risk helping Microsoft's
"That sounds to me that he's very keen to make a quick decision,"
he said. "If the process is done too quickly it will give Microsoft
an easier time to appeal a decision on procedural grounds."
Rule didn't disagree. He said Microsoft would appeal any breakup
order, no matter when it comes down.
"Nothing today lessened Microsoft's chances of prevailing on
appeal," Rule said. He said trustbusters "really have no idea what
kind of impact their remedy proposal would have on the marketplace."