Landmark Microsoft breakup ruling due today

Larry Margasak

Wednesday, June 7, 2000 | 11:10 a.m.

WASHINGTON -- The judge overseeing the Microsoft Corp. antitrust lawsuit said he would rule today in the historic case that could lead to a breakup of the software giant.

U.S. District Judge Thomas Penfield Jackson moved swiftly after Microsoft filed a fresh response Tuesday to the Justice Department's plan to divide the corporation into two companies. He announced his final judgment would be made public at 3 p.m. EDT.

The ruling was expected after the printing deadline of today's Las Vegas Sun. But the results will be available on the Sun's Internet website vegas.com Microsoft Chairman Bill Gates canceled scheduled appearances in Washington today and returned to company headquarters in Redmond, Wash.

As Microsoft was filing the final legal papers before Jackson's ruling, Gates appeared Tuesday at a congressional hearing on the future of high technology in the United States and around the world.

In its filing, Microsoft, disdainful of the department's response to the company's earlier concerns, asked Jackson to include previously suggested language that would give a broken-up Microsoft more freedom to enter into agreements with software developers and computer makers.

"Instead of agreeing to correct the many defects in the revised proposed final judgment, and thereby minimize the damage that its entry would inflict on a wide range of participants in the computer industry, the government has agreed to only a few cosmetic changes," Microsoft's lawyers wrote.

In the brief, Microsoft also said the Justice Department was, in its recent filing, "confirming that certain provisions are more extreme than they might appear at first blush" and "blithely ignoring substantial problems Microsoft identified regarding the feasibility of complying with many of the provisions as drafted."

In Washington, Justice Department spokeswoman Gina Talamona dismissed Microsoft's response. "The filing rehashes Microsoft's old arguments, ignores the extensive violations found by the court, denies the need for serious relief and grossly distorts our proposed remedy," she said.

Microsoft had been due to file the brief today. But company spokesman Jim Cullinan said the "cosmetic" filing by the government made it easier to reply quickly.

Jackson had been set to rule on the case -- including whether to split the company into two parts -- last week, but the Justice Department asked for more time so it could address clarifications brought up by the company.

In Monday's court filing, the Justice Department agreed to grammatical and semantic changes, but refused to concede to the company on major points such as giving Microsoft additional time to nail down details on how the breakup should occur, or more freedom in licensing and marketing its products.

The department and 17 states have pushed to have Microsoft broken into two separate companies -- one to market and produce Windows, and the other to handle Microsoft Office and other applications software, along with the Internet Explorer Web browser.

In a ruling that shook the company, the industry and the financial markets, Jackson held April 3 that Microsoft engaged in anticompetitive conduct in violation of antitrust laws.

Microsoft has said it will appeal the entire case after Jackson issues his final ruling.