Microsoft break up defended

The government rejected Microsoft's concessions

By BBC News Online's Kevin Anderson

The US Government has defended its proposal to break up software giant Microsoft and called the company's proposed remedies cosmetic.

The Justice Department said Microsoft had proposed nothing that would undo the harm to competition caused by its illegal conduct.

Last week, Microsoft offered to change some of its business practices after a judge found it had violated US anti-trust laws.

Microsoft's proposed remedy is neither serious nor sensible

Justice Department

The government restated its assertion that breaking the company in two is the only remedy that could possibly end "Microsoft's persistent unwillingness to abandon its widespread use of unlawful practices to maintain and extend its Windows monopoly", the Justice Department said.

Under the government's break up plan, one of the new companies would sell the Windows operating systems, and the other company would be responsible for selling Microsoft hardware, internet services and other Microsoft software.

The two companies would be prevented from recombining for at least 10 years.

The government also responded to Microsoft's demands for a six-month delay in the trial to prepare a defence against the break up plan, saying it was "merely an attempt to delay the day when the law will hold it accountable for its illegal acts".

'Filled with loopholes'

Jim Cullinan, a Microsoft spokesman, said: "It's unfortunate but not surprising that the government is attempting to defend its extreme remedy proposal. We don't believe there's any kind of basis in law or in the case to warrant such a remedy."

Government plan

Microsoft to split into two companies

One to sell Windows operating systems

The other to sell hardware, software, internet services

No re-merger for 10 years

Business restrictions while appeal in progress

Microsoft asked the judge a week ago to dismiss the break up plan, calling it radical and unsupported by the evidence in the trial.

Instead, the company offered to accept a number of remedies including removing a link to its Internet Explorer web browsing software from the desktop and also giving computer makers more freedom to load non-Microsoft programmes on their computers.

Microsoft counter-proposals

No break-up

Six-month trial delay to prepare defence

Computer makers allowed to promote competing software on Windows desktop

The government blasted the plan as "ineffective and filled with loopholes".

The Department of Justice said: "It would not have prevented Microsoft from engaging in many of the illegal acts found by the District Court, nor would it prevent the company from using its monopoly power in the future to engage in the same kind of illegal behaviour to crush new innovations."

Mistrust of Microsoft

The government mistrusts Microsoft and is particularly sensitive to loopholes.

It's unfortunate but not surprising that the government is attempting to defend its extreme remedy proposal

Microsoft spokesman Jim Cullinan

The company was able to use a loophole in a 1994 settlement with the company to integrate its Internet Explorer web browser with the Windows operating system.

Some economists and legal experts say that a break up plan would be simple and avoid a complicated system of oversight to ensure Microsoft's compliance with curbs on its conduct.

A hearing on the case is scheduled to take place before US District Judge Thomas Penfield Jackson on 24 May.

Lawyers for both sides will both offer arguments to support their remedy proposals, and Judge Jackson will set a timetable for the hearings.