Microsoft Rips Government’s Breakup Plan
Microsoft Corp. on Wednesday blasted a government plan to break up the company and submitted a list of high-tech and Hollywood luminaries as potential witnesses to back its objections to the proposed antitrust sanctions.
“When an injunction is so vague and ambiguous that it ‘defies comprehension,’ it is void and unenforceable,” wrote Microsoft, citing a 1967 federal court decision to support its argument.
Microsoft’s 40-page filing to presiding U.S. District Judge Thomas Penfield Jackson represents the last written submission in the landmark antitrust case. Jackson could issue a final ruling in the 2-year-old antitrust dispute as early as today, but experts say he will probably wait until Friday.
The Justice Department, 17 states and the District of Columbia have proposed that Microsoft be split into two companies: one that would make the flagship Windows operating system software and a separate company that would market all other products, including Microsoft Office, WebTV and the Microsoft Network.
But Microsoft on Wednesday called the government’s plan unrealistic and too complicated. The software giant said the plan failed to address a number of issues, including the allocation of financial resources, the matter of foreign regulations of Microsoft subsidiaries and software engineering questions.
Microsoft also criticized Jackson for rejecting its request for extensive hearings on remedies and instead limiting debate on the issue to less than five hours May 24.
“As a general matter, Microsoft believes the government has substantially underestimated the scale and complexity of the tasks required” for a breakup, Microsoft said.
Microsoft could not be reached for comment Wednesday. But the Associated Press quoted Microsoft spokesman Jim Cullinan as saying, “We are offering these [papers] with the obvious caveat that we do not believe that such an extreme and damaging remedy would be sustained by the appellate process.”
The Justice Department issued a statement saying that the company’s “pleading does not come to grips with the fact that Microsoft has been found to have repeatedly engaged in serious legal violations, and serious remedies are required to restore competition and prevent similar violations in the future.” In a separate filing, Microsoft’s lawyers said Jeffrey Katzenberg, co-founder of Hollywood movie studio DreamWorks SKG, and Compaq Computer Corp. President Michael Kapellas were among seven witnesses who had agreed to testify to the negative effects that a Microsoft breakup would have on their companies and industries.
But Microsoft’s witness offer was viewed as little more than a symbolic move to support the company’s contention that Jackson abused his judicial discretion by abruptly closing off further witness testimony in the case May 24.
“They are clearly trying to raise a foundation for a procedural issue in the case on appeal,” said antitrust expert Andrew Gavil, a law professor at Howard University. Microsoft, he added, “lived by a hardball strategy and it backfired. They had plenty of opportunity to offer witnesses, but then they ran out of time. Jackson called their bluff.”
The government has asked that any breakup of Microsoft take effect one year after the company exhausts its legal appeals. In the meantime, the government has proposed tough restrictions on Microsoft’s business practices that would begin 90 days after the judge rules.
Microsoft will probably seek to prevent Jackson from imposing some of the business restrictions. The 63-year-old jurist could choose to reject some or all of the government’s remedies proposal.
