State and Federal Officials Disagree on Microsoft Remedy
By JOEL BRINKLEY
WASHINGTON -- State and federal officials trying to prepare remedy proposals in the Microsoft antitrust case have not settled on a common approach, officials say, and the states are having trouble agreeing even among themselves.
On one critical point, officials say, the 19 states involved now seem in accord: None is advocating a fundamental breakup of the company. "Everybody's in that mode," said one official with knowledge of the negotiations. And there are indications that the Justice Department concurs.
But beyond that, the state attorneys general remain at odds on the approach to take. "It's like trying to herd a bunch of cats," said one official familiar with the states' deliberations. Another, who has been involved in several recent multistate lawsuits, said, "There has never been a case where as many people have had as many different opinions as this one."
At this point, the government officials involved in the case -- federal and state -- are not even at the same table, even though they face a deadline of next week for their recommendations.
Justice Department officials are locked in private deliberations over the federal government's remedy proposal, and there have been no formal meetings between state and federal officials to formulate a common proposal.
But several state officials have spoken with federal officials in recent days, and as one official put it, "There's a great deal of overlap in our approaches." This suggests that the Justice Department, like the states, is focusing on remedies short of a breakup.
After Judge Thomas Penfield Jackson found Microsoft in wide violation of state and federal antitrust laws on April 3, he told lawyers for both sides that he wanted to complete the penalty, or remedy, phase of the case within 60 days. As a result, the federal and state officials promised to submit their remedy proposals sometime between Tuesday and Friday of next week.
The judge, who will make the final decision on remedies, made it clear that he would prefer just one proposal from the plaintiffs.
All of the plaintiffs said they believed their position would be a great deal stronger if they could agree on just one proposal. Otherwise, "Microsoft will be able to say, 'See, not even all of the plaintiffs agree on this,"' one official noted. Even if the two groups submit separate proposals, they are likely to be quite similar with only a few points of divergence, another official said.
Jackson said he would be willing to accept two proposals, one from the states and another from the federal government, if the two groups cannot agree. And to address the divergent opinions among the state officials, the judge also said he wanted a proposal representing a majority view of the states. That could lock out any attorneys general who insist on a different idea.
Despite that, some states, caught in difficult and sometimes contentious negotiations, are threatening to submit their own proposals if their ideas are not accepted by the others. But other officials said they believed that was simply a hardball negotiating tactic, not a real threat.
"The judge doesn't want that, so I don't think it will happen," one official said. Another said, "This is phenomenally difficult and phenomenally complicated, so it's no wonder they're having a hard time."
While breaking up the company appears to be off the table, several ideas that go beyond simply trying to modify Microsoft's behavior are under serious discussion.
Among them, a few attorneys general want to "fence in" Microsoft's cash reserve, $17.8 billion, to prevent the company from using it to buy other software companies and fold their products into the Windows operating system.
Others are interested in forcing Microsoft to spin off Internet Explorer, the Web browser that was at the center of the suit. The idea would be to create a new company and recreate competition in the Web browser business. Microsoft folded Internet Explorer into the Windows operating system, which means that it is installed automatically on nearly 90 percent of all computers sold.
Another idea under discussion is to force Microsoft to make Office, its suite of application programs, available for other operating systems, including Linux. Office, including the Word, Excel and PowerPoint programs, is by far the most widely used program suite. Its market share exceeds 90 percent.
The idea behind this proposal, one official said, would be to make other operating systems competitive. (Microsoft already makes Office available for Apple Computer's operating system.)
Representatives of most of the states met last Thursday in Chicago to begin trying to forge a consensus position. While the state and federal officials have been formulating their proposals separately thus far, one official said the two sides will try to schedule a meeting within the next few days with the goal of submitting one joint proposal.
A handful of core states are doing most of the work. They are represented by the attorneys general or aides from California, Connecticut, Florida, Iowa, New York and Wisconsin.
"We have people preparing draft orders" for consideration by the other states, one official said, adding that "there's a high-level agreement" among the core states. "We've reached out to a lot of the others." But some attorneys general "are more concerned about different aspects than others," he said.
One senior state official said he thought it "more likely than not" that the states would eventually agree among themselves, adding that "there could be convergence" with the Justice Department, "but that is not at all certain."
nytimes.com
The gang of 19 is nothing but a bunch of pushy cats. Accumulate on dips, IMO.
Mick $$$ |
