The MSFT albatross - when will it end?
Bloomberg:
quote.bloomberg.com
Top Financial News
Wed, 17 May 2000, 11:50pm EDT
Microsoft Judge Asked by U.S. Not to Delay Breakup (Update2)
By James Rowley
Washington, May 17 (Bloomberg) -- Antitrust enforcers urged
the judge who found Microsoft Corp. illegally defended its Windows
monopoly to reject the company's proposal to delay consideration
of a government plan to split up the No. 1 software company.
The U.S. Justice Department and 17 states argued that
Microsoft's request for a six-month delay is a ``transparent
effort to delay the determination and implementation of a remedy
for its illegal acts as long as possible.''
A quick resolution of the case is needed to restore
competition, particularly because any breakup order would be
stayed while Microsoft appeals the case, the government said in a
reply to the company's May 10 remedy proposal.
``Microsoft's violations have been established,'' the
government said. ``Liability is not in doubt, and relief should be
as prompt as possible.''
The government's breakup plan should have come as no surprise
to Microsoft, the Justice Department and states argued.
``Microsoft has known for several months about plaintiffs'
interest in structural relief,'' antitrust enforcers said.
The government's plan is unwarranted by the facts of the
case, Microsoft said.
``Even if you accept the court's findings, the government's
proposals are like using a chainsaw to cure a common cold,'' said
Microsoft spokesman Jim Cullinan.
Microsoft's Proposals
Besides asking the court to delay remedy proceedings,
Microsoft last week told the court it would accept certain
business restrictions.
The company plan would give computer manufacturers such as
Compaq Computer Corp. and Dell Computer Corp. greater flexibility
to control the computer ``desktop,'' which appears when no
programs are running.
Manufacturers could hide the screen icon for Microsoft's
Internet Explorer Web browser under the company proposal, which
also would give software developers more timely access to code
needed to write applications for Windows.
Microsoft said it wouldn't put conditions on the sale of its
applications to pressure computer makers not to promote a rival
product.
Microsoft's proposal would bar it from prohibiting Internet
services promoted in Windows to feature rival products such as the
Netscape Navigator Web browser, made by America Online Inc.
Microsoft has already abandoned that practice.
In today's filing, the government said Microsoft's
alternative proposals ``would leave it free to continue the very
practices which . . . the court found to be unlawful and would do
nothing to restore competition.''
Enforcers Fire Back
Behavioral limits won't cure the company's antitrust
violations, the government said.
``Structural relief is the only remedy that has a chance of
ending Microsoft's persistent unwillingness to abandon its
widespread use of unlawful practices to maintain and extend its
Windows monopoly,'' the government said.
Splitting Microsoft into a company that makes applications
such as the popular Microsoft Office software suite and another
that makes the Windows operating system would promote competition,
the government said in its initial, April 28 remedy proposal.
``There is no alternative that would restore competitive
conditions without significantly greater burdens and potential
inefficiencies,'' the government said.
Breakup
Quoting from internal company e-mails and speeches by
Microsoft executives, the government disputed the software giant's
contention that a breakup would destroy the relationship between
developers of the Windows operating system and employees who
design Office and other applications.
``Microsoft has long been organized, and reorganized, into
separate operating systems and applications divisions, with little
dependency between them,'' the government said.
The brief cited Microsoft's new chief financial officer, John
Connors. ``We've really had two enormously successful franchises,
the Windows franchise and the knowledge worker franchise . . .
Microsoft Office,'' Connors was quoted as saying.
``Far from integration into a single business, Microsoft's
own officials have increasingly come to realize -- outside the
litigation -- that it needs to create separate business units,''
the brief said. As evidence, the government cited an e-mail by
Microsoft executive Brad Silverberg. A new team that would
reinvent Windows, he wrote, ``really needs to be a separate
company within the company.''
Microsoft says it needs six months to gather evidence to
question government witnesses about the proposed breakup. The
court shouldn't begin hearings on less severe, interim remedies
until Aug. 7, the company said.
Jackson has signaled he is anxious to conclude the remedy
phase of the trial, scheduling a May 24 hearing on remedies. Legal
experts say he is likely to grant Microsoft some period of delay,
though not what the company sought.
``The government has invited the court to destroy or hobble
an American company that is a model of success,'' Microsoft said
in its filing last week.
¸2000 Bloomberg L.P. All rights reserved
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Once this market turns for this run late may - June rally MSFT will be tradable to 80. It closed at 67 11/16 fwiw
Best Regards, J.T. |
