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Microsoft Corp.

Microsoft Ordered to Break Up into Two Companies

Strategic Insights

— 1 min read

US District Court Judge Thomas Penfield Jackson has ruled that Microsoft Corp. must be broken up into two companies, one focused on operating systems and the other on software applications. In a scathing critique, Jackson lambasted Microsoft for resisting the breakup and attempting to preserve its Windows operating system monopoly through antitrust practices. Microsoft must submit a divestiture plan within four months, with the US Department of Justice having 60 days to respond and the company receiving an additional 30 days to file a rebuttal.

Key Takeaways:

  • Microsoft has been ordered to break up into two companies, one focused on operating systems and the other on software applications.
  • The company must submit a divestiture plan within four months, with the US Department of Justice having 60 days to respond.
  • Microsoft will receive an additional 30 days to file a rebuttal to the Justice Department's response.
  • The company must operate under a business-as-usual plan until any breakup occurs, but will be responsible for transferring all relevant personnel, systems, and intellectual property in the event of a breakup.
  • Judge Jackson criticized Microsoft for resisting the breakup and attempting to preserve its Windows operating system monopoly through antitrust practices.
  • Microsoft's attempt to preserve its dominance through monopolistic practices was deemed "bad for consumers" and "an unwarranted punishment".
  • The company's "profession of surprise" over the breakup was deemed "not credible" by Judge Jackson.
  • Microsoft's violation of antitrust laws has been established, with the company's actions deemed a possibility or probability since the beginning of the last century.

Statistics:

  • 4 months: the timeframe within which Microsoft must submit a divestiture plan to break up the company.
  • 60 days: the timeframe within which the US Department of Justice has to respond to Microsoft's plan.
  • 30 days: the timeframe within which Microsoft will get to file a rebuttal to the Justice Department's response.

Sources:

  • Newsbytes.com, http://www.newsbytes.com
  • WIRES ONLINE, LEGAL, BUSINESS, PC/MSDEC/PHOTO (20000607)

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