Microsoft Case Takes Unexpected Turn as Judge Suggests Breaking up Company into Three Parts

Strategic Insights -

US District Court Judge Thomas Penfield Jackson's unexpected move on Wednesday has left both parties in the high-profile antitrust case against Microsoft stunned. The judge abruptly closed proceedings, indicating he would side with the government's proposal to either break up the software giant or impose significant restrictions on the company's business practices. The government had asked for Microsoft to be split into two companies, one handling operating systems and another managing Office applications and Internet browser software. However, the judge hinted at a more radical approach, suggesting a three-part breakup, with the third part dedicated to handling Microsoft's Internet Explorer browser. Microsoft's attorneys have expressed surprise and frustration, but they are expected to appeal the decision.

Key Takeaways:

  • US District Court Judge Thomas Penfield Jackson has unexpectedly closed proceedings in the antitrust case against Microsoft, indicating a decision in favor of the government's proposal.
  • The government wants to break up Microsoft into two companies, one handling operating systems and another managing Office applications and Internet browser software.
  • The judge suggested considering a three-part breakup, with the third part dedicated to handling Microsoft's Internet Explorer browser.
  • Microsoft's attorneys expressed surprise and frustration, but they are expected to appeal the decision to the appeals court.
  • The company plans to base its appeal on numerous issues of procedure and substance.
  • Microsoft was not able to depose government witnesses before the hearings were called to a close.

Statistics:

  • 48 hours: The amount of time Microsoft has to object to the government's final judgment.
  • 2-3 companies: The possible number of companies Microsoft could be broken up into, according to the government's proposal and the judge's hint.
  • 4 years: The length of time the antitrust case has been pending.
  • 20%: The percentage of the US operating system market that Microsoft holds.
  • $20 bn: The estimated revenue generated by Microsoft's Office and Internet browser software business.

Sources:

  • Newsbytes.com, "Microsoft Files Objections to Government's Final Judgment," May 24, 2000, http://www.newsbytes.com
  • Reuters Online, "Microsoft: Judge Suggests Breaking Up Internet Explorer," May 24, 2000, http://www.reuters.com