Microsoft Faces Possible Breakup Amid Antitrust Charges

The potential breakup of Microsoft into several companies is being considered by federal and state prosecutors, with discussions between the Justice Department and representatives from 19 states who accuse the company of illegal business practices. The plan, which could see Microsoft split into similar companies to those created after the AT&T antitrust case, would allow for the forced sharing of the Windows code, enabling other companies to develop their own versions of the operating system. Alternatively, the company could be broken up into separate units, such as a two-way split or a vertical split into two or three identical units, nicknamed "Baby Bills." This comes as Microsoft faces antitrust charges, with prosecutors emboldened by the company's struggling defense in court.

Key Takeaways:

• Microsoft, defending itself against federal antitrust charges, could be broken up into "Baby Bills" under a plan being considered by federal and state prosecutors.
• The company's Windows code would be forced to be shared with other companies, allowing them to develop their own operating systems.
• Three possible outcomes include:

+ Breaking up Microsoft into two-way split, where one branch sells Windows and another handles other software products.

+ Vertically splitting the company into two or three identical units, nicknamed "Baby Bills".

+ Issuing a detailed order banning many of Microsoft's business practices, including some inter-office communications.

• Prosecutors have been emboldened to consider these options due to Microsoft's struggling defense in court.
• Company witnesses have made damaging admissions and admitted to embarrassing mistakes.
• Microsoft claims it is winning the case and any talk of breakup is "wishful thinking" by the government.

Statistics:

• 90% of the world's computers operate under Windows systems.
• 19 states are accusing Microsoft of illegal business practices.

Sources:

• "Microsoft could face breakup under plan being considered by feds, states." - Donald L. Barlett, The Washington Post, copyright 1999
• "Microsoft defends itself against antitrust charges." - United Press International (UPI), copyright 1999