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Microsoft Corp.

Justice Department Sticks to Plan to Punish Microsoft for Antitrust Violations

Strategic Insights

— 1 min read

The Justice Department has announced that it will proceed with its plan to punish Microsoft Corp. for antitrust violations by dividing the software giant into two distinct companies. This decision comes after a federal judge, Thomas Penfield Jackson, abruptly ended the drawn-out proceedings in the federal and state antitrust case, asking the government to polish its final judgment and giving Microsoft 48 hours to object. The government had initially proposed splitting Microsoft into two companies, one to handle operating systems and the other to manage Office applications, with the possibility of a third entity to control the Internet Explorer browser.

Key Takeaways:

  • The Justice Department will proceed with its plan to punish Microsoft for antitrust violations by dividing the company into two distinct entities, despite Microsoft's attempts to delay the process.
  • Microsoft's attorneys had planned to ask for an additional six months to prepare a legal defense against the government's breakup remedy but were denied by Judge Jackson.
  • The Justice Department's updated filing lengthens the period before which the judgment would take effect from 30 days to 90 days.
  • Microsoft will be given until Tuesday to issue its response to the DOJ's filing, after which Judge Jackson is expected to rule on the case within two weeks.
  • The proposed breakup plan will give shareholders a higher threshold for ownership in each company, raising the limit from three to five percent.
  • Microsoft's appeal is expected to focus on the lack of opportunity for deposing government witnesses before the hearings were closed.
  • Microsoft Chairman Bill Gates and President and CEO Steve Ballmer were expected to testify on behalf of the company, but this will not occur as planned.

Statistics:

  • 2 years: The duration of the antitrust case before Judge Jackson's ruling.
  • 30 days: The original period before the judgment would take effect, which has been extended to 90 days.
  • 5%-3%: The new and original threshold for stock ownership in each of the proposed companies.
  • 90 days: The new period before the judgment will take effect.

Sources:

  • Newsbytes, reported by http://www.newsbytes.com. (20000526/WIRES ONLINE, LEGAL, BUSINESS/MSSPLIT/PHOTO)

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