US District Judge Thomas Penfield Jackson's interest yesterday in a recommendation to split Microsoft into three companies instead of two as previously suggested by the US Department of Justice (DoJ) has surprised industry experts and legal scholars. The observers said the Judge seems determined to make sure the software giant does not continue as one entity.
"It seems clear the Judge was very supportive of the Government's claims for a significant remedy," Daniel Rubinfeld, a US-based professor of law and economics said. "The talk now seems to be not whether there is a breakup, but what form it will take."During the hearing yesterday, Jackson told the DoJ to submit a revised remedy proposal by today that could involve the three-way breakup of Microsoft.
Despite pleas from Microsoft's lawyer for more time, Jackson gave the software company until Tuesday to file a response.
Earlier in the day, Jackson referred to a friend-of-the-court brief filed by the Software & Information Industry Association (SIAA) and the Computer & Communications Industry Association (CCIA). The associations advocated the breakup of Microsoft into an operating systems company, an applications company and an Internet company. Jackson characterised it as an "excellent brief."Jackson does not have to rely on recommendations of any of the parties in the antitrust lawsuit. Instead he can use his own judgment to take whatever action he sees fit, Rubinfeld said.
"The Judge's job is to find the best remedy that is appropriate in light of the harm caused," Rubinfeld explained. "He could say he doesn't like any of the proposals [from the parties to the lawsuit]."In fact, Jackson said he wondered why the DoJ had not recommended creating three instead of two new companies from Microsoft, saying the DoJ proposal might merely result in two separate monopolies.
One industry analyst said the separation of the software giant's Internet business would be a positive step toward ending Microsoft's monopoly.
"Microsoft ties their operating systems to Internet portals, so when they do business with content vendors like sports channels or ticket services, they would force them to use Microsoft NT servers and the like, and that confers a monopoly power," Tony Picardi, an IDC analyst said.
By all accounts, yesterday was not a good day for Microsoft. The company's stance of stiff opposition to all Government claims in the antitrust case has resulted in little leeway from Jackson, one legal expert said.
"Microsoft is not buddy-buddy with Judge Jackson and the relationship hasn't warmed up over time," Randal Picker, a US-based law professor observed. "There is something in [Microsoft's] bones that prevents them from saying 'We'll do things like everybody else'."Picker said he was impressed with the judge's apparent willingness to split up the software giant into two or three companies. "It's fairly surprising," Picker said. "It [the breakup] is a strong remedy."