Microsoft Expected to Offer Mild Remedies
In a sharp counterproposal to the dramatic breakup plan proposed by government trustbusters last month, Microsoft Corp. is preparing relatively mild remedies that call for the software giant to hide access to its Web browser and give computer makers more flexibility to alter the appearance of its Windows operating system.
Microsoft is also expected to seek more time to respond to the government and to depose some or all of the experts the Justice Department and 17 states relied on in preparing their proposal for splitting the company in two that was submitted to U.S. District Judge Thomas Penfield Jackson on April 28.
Microsoft’s counterproposals, which are expected to be filed Wednesday, are aimed at convincing Jackson that there are antitrust sanctions milder than the government’s proposed breakup plan that could remedy Jackson’s finding that the software giant is a “predatory” monopoly that broke state and federal antitrust laws.
Jackson ruled last month that Microsoft was anti-competitive by using its Windows software--which runs more than 90% of the world’s personal computers--to thwart rivals and extend the company’s dominant emerging information technology markets. After Microsoft files its remedy plan, and the government responds by May 17, Jackson will hold a hearing May 24. That meeting, experts say, is likely to lead to additional ones that could add a week to three months to the trial that started in October 1998. A final decision on sanctions is not expected until the summer or fall.
A Microsoft spokesman could not be reached Sunday. But the remedy plan being drafted by Microsoft remains in flux, according to sources familiar with the briefing that chief Microsoft lobbyist Jack Krumholtz and other company officials gave congressional aides last week.
These sources described the meeting with Microsoft officials as a “briefing on process” in which the software maker not only laid out several plans for rebutting the government’s remedy proposal but also looked ahead to any potential appeal of the landmark case. Sources said Microsoft officials expressed optimism that the company would probably prevail on appeal.
“They seemed pretty confident about their position,” said one source familiar with the meeting.
By giving computer makers freedom to alter Windows and by proposing to camouflage its Internet Explorer Web browser from computer users, Microsoft appears to be trying to minimize the damage from a key finding in the antitrust case: that the company broke the law by tying the Internet browser to the Windows operating system.
Microsoft has long contended that its browser was welded so tightly to its flagship Windows operating system that the two could not be separated.
By giving some ground on the browser issue, Microsoft was seen as trying to shift Jackson’s attention away from the government’s proposed breakup of Microsoft into two companies: one that would develop the flagship Windows operating system and a second independent company that would develop all other Microsoft products, including WebTV, the Microsoft Network and the lucrative Microsoft Office business productivity software.
“It’s better to have a positive proposal of something than to say that nothing at all is appropriate,” said antitrust expert William E. Kovacic, a law professor at George Washington University in Washington. “It helps give the judge a foundation for focusing on milder solutions. . . . When the judge has spoken [publicly] about remedies, he has expressed his preference for Microsoft offering a version of Windows that gives consumers a choice.”
In its Sunday editions, the Washington Post reported that Microsoft is also considering providing third-party software developers with more timely and open access to Windows’ underlying software code. The concession is aimed at helping independent software companies develop software that runs more reliably on Windows, the paper said.
The Post also reported that Microsoft would agree to not engage in certain deals with PC makers that promote Microsoft products over those of rivals.
But several legal observers said Sunday that the proposals are likely to be bitterly opposed by the government and are unlikely to spare the company from considerable financial exposure to more than 100 private antitrust suits that have been filed in hopes of capitalizing on Jackson’s legal declaration that Microsoft is an illegal monopoly.
What’s more, one of Microsoft’s staunchest supporters says the company might not even find complete salvation by pursuing legal appeals.
“I expect the Court of Appeals for the D.C. Circuit to reverse much of [Judge Jackson’s] decision but not all of it,” said Ronald A. Cass, dean of Boston University School of Law and a onetime consultant to Microsoft.
