- The Washington Times - Friday, September 7, 2001

The Bush administration will not ask U.S. District Judge Colleen Kollar-Kotelly to break up Microsoft Corp. for violating antitrust laws, a move made to end the ongoing case as quickly as possible.
The Justice Department said it decided to shift the federal government's legal strategy established by the Clinton administration to hasten a resolution in the case against the Redmond, Wash.-based software giant.
The Justice Department also told Microsoft yesterday it will not try to prove that the company illegally tied its Internet browser to its Windows operating system. U.S. District Judge Thomas Penfield Jackson ruled in June 2000 that Microsoft illegally bundled the browser and operating system. But an appeals court sent that matter, along with the penalty issue, back to the lower court for reconsideration.
While the shift will likely end the landmark antitrust suit sooner than expected, the decision is significant because it lets the massive technology company remain intact.
The decision by the Justice Department to abandon a breakup is considered by opponents and supporters of the antitrust case to be a huge victory for Microsoft because it narrows the antitrust case against it.
It will likely hinder the company's competitors and won't do much to restore competition, said Ed Black, president of the Computer and Communication Industry Association, a technology industry group that opposes Microsoft.
"Overall competitiveness in the industry probably won't be greatly increased" by sanctions on Microsoft's business practices, he said.
Microsoft had little to say about the Justice Department's decision.
"We remain committed to resolving the remaining issues in the case," Microsoft spokesman Vivek Varma said.
Microsoft shares fell $1.72 yesterday on the Nasdaq stock market, closing at $56.02.
The Justice Department said it will build its case for Micorsoft's punishment around the U.S. Appeals Court's decision in June that Microsoft has monopoly in the market for operating systems.
The states said yesterday they agreed with the Justice Department's move.
"The states are joining with the Department of Justice in the decision not to seek a breakup of Microsoft. Since the court of appeals decision, the states and the DOJ have directed their efforts to one objective the quickest and most effective remedy possible," said Iowa Attorney General Tom Miller, who helped lead the states' fight against the company.
The states also said their hand was forced by the appeals court decision.
"We may not agree with the court of appeals on breakup or tying, but it has set a standard that would mean protracted preceedings and delayed relief with a highly uncertain relief," Connecticut Attorney General Richard Blumenthal said.
Consumer groups and Microsoft's countless opponents, however, cringed at the Justice Department's decision, which they said amounted to letting the technology company off the hook.
"While Justice is saying they are taking these steps to obtain prompt, effective and certain relief for consumers, we fear that conduct remedies are unlikely to be effective and will likely signify that it is business as usual for Microsoft," Mr. Black said.
Sen. Patrick Leahy, Vermont Democrat and chairman of the Senate Judiciary Committee, said the strategic shift may be good because it helps avoid a lengthy trial.
"The department's intention to pursue remedies targeted at Microsoft's conduct may produce more immediate results for consumers, competitors and computer sellers than any structural solution could," Mr. Leahy said.
The Justice Department said it will seek court-ordered restrictions on Microsoft's business practices. That could include one to give all software developers access to code that lets programs run on Windows, a penalty Judge Jackson said he would impose when he issued his ruling last year.
The Justice Department didn't say whether it would try to prevent Microsoft's release of XP, its updated Windows operating system next month.
The two sides are due back in court Sept. 21 to discuss the status of the case, and they must file a joint report by Sept. 14 that indicates how they will proceed with the case.
At a White House ceremony yesterday, President Bush said little about the Justice Department's decision.
"During the course of the campaign and throughout my administration I have made it abundantly clear that on issues relating to lawsuits, ongoing lawsuits, that I expect the Justice Department to handle that in a way that brings honor and thought to the process," the president said.
The decision outlines the differences between President Clinton, who went after Microsoft aggressively, and President Bush, who has signaled that he wants limited federal involvement in the private sector, Washington antitrust attorney Glenn B. Manishin said.
But it was a surprise that the Bush administration embraced conduct remedies, said Mr. Manishin, who helped write a study last year that advocated the breakup up Microsoft.
"Once you decide there will be no breakup and that you will police Microsoft's conduct, you need a lot of police to enforce the restrictions," Mr. Manishin said.
The Justice Department and 20 state attorneys general sued Microsoft in May 1998, charging that it illegally thwarted competition to protect and extend its monopoly on software. One state later dropped from the suit, and New Mexico Attorney General Patricia Madrid said in July she settled with Microsoft.
The Bush campaign reported $61,500 in contributions from Microsoft employees during the 1999-2000 election cycle, according to the Washington-based nonprofit watchdog group Center For Responsive Politics. U.S. Attorney General John Ashcroft, a former senator, $9,000 from Microsoft's political action committee during the same period.
Microsoft spent $6.4 million in 2000 to lobby Congress and the Clinton administration, according to the group.


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