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Microsoft to Not be Broken in Two

By John Virata
The Department of Justice last week decided against breaking up the world's largest software company, in part, to "streamline the case with the goal of securing an effective remedy as quickly as possible." This bodes well for Microsoft and its supporters, but doesn't bode well for Microsoft's competitors and the 19 states that brought on the original suit. The DOJ also decided against pursuing the tying claim, because "pursuing a liability determination on the tying claim would only prolong proceedings and delay the imposition of relief that would benefit consumers."

Now Microsoft wants the entire case thrown out and started anew, and wants the U.S. Supreme Court to take the case from Judge Colleen Kollar-Kotelly before she commences penalty proceedings. It seems grossly premature to throw out the case because of inappropriate comments that the former judge, Thomas Penfield Jackson, made prior to his decisions on the case. While Justice found Judge Jackson's comments inappropriate at best, it certainly did not find enough inappropriate behavior to warrant throwing out the case. To start a new case, as Microsoft wants, would be grossly unfair to U.S. consumers and taxpayers.

While Justice wants expedited relief "in the name of consumers" it appears that Justice has de-fanged the most controversial remedy, the breaking up of the company. This case is arguably the most important antitrust suit this country has ever faced, and could have lasting implications with regard to future technologies and competition in the technology, and other markets.

While Justice won't break up Microsoft as a remedy for its anti-competitive behavior, several of the states that brought on the lawsuit, including New York and California, intimated last week that they will pursue their own remedies if they aren't satisfied with remedies that arise out of the Justice Department's decisions.

As the DOJ decides on potential remedies, Microsoft is readying the release of its Windows XP operating system, the company's next generation OS that already includes several controversial features in its own right, including software that enable users to play various media such as video and audio files, and an image editing application for enhancing and manipulating photographs. And this is not to mention the very controversial upgrade feature, that in a nutshell enforces you to pay for future upgrades, to what were previously known as service packs. While a media player and image editing application may seem benign, the fact is, there are software developers who sell such applications for a living, and will most likely be harmed by the new "features" in XP that essentially do away with the need for such applications, at least on an elementary level.

While Microsoft has long bundled separate applications, such as Paint and Card File, in past versions of Windows, this marks the first time that an image editing application will be bundled with the OS, and this has got to irk the likes of Ulead Systems, Adobe Systems, and MGI Software, Eastman Kodak, and other software developers who sell such software. What will Justice do, if anything, if it determines that some of the features in Windows XP, "built in to give the consumer more value" are found to be anti-competitive. Would Microsoft line the coffers of whatever political party is in power to ensure that the company can successfully conduct business as usual? Can Justice mete out a remedy that is fair to Microsoft and will satisfy the 19 states attorneys general that filed the original suit? Or will we see a fresh lawsuit following the release of Windows XP?

John Virata is Senior Producer of DigitalProducer.com. His views do not reflect those of DMN

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John Virata is senior editor of Digital Media Online. You can email him at [email protected]
Related Keywords:microsoft, antitrust, trial, opinion

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