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Thursday, 25 May, 2000, 06:15 GMT 07:15 UK
Microsoft split 'not enough'
The judge in the Microsoft anti-trust case has said it might not be enough to split Microsoft into two parts, and that a three-way division could be required.
Judge Thomas Penfield Jackson stunned courtroom observers on Wednesday by suggesting that "a bisection will in effect create two separate monopolies."
He raised the possibility of a three-way split of Microsoft, by praising as "excellent" a court filing from the Computer and Communications Industry Association and the Software and Information Industry Association.
Their filing suggested splitting the company into three.
Industry and legal sources said that such a move would be unlikely, since it would require the software giant to set up a stand-alone browser company whose prospects would be doubtful.
The judge also surprised lawyers by abruptly ending the first hearing into the break-up proposals.
He asked the Justice Department to revise its plan for splitting the company into two parts and re-submit it on Friday.
He also rebuffed Microsoft's calls for a delay, announcing his intention to "proceed to the merits of the remedy" for violations of anti-trust law.
The stage is now set for an early decision on what will happen to Microsoft, but it is still not clear when Judge Jackson will make his ruling.
Microsoft's lawyers said they planned to appeal based on claims that they had been denied a fair hearing.
Microsoft fight back
Microsoft counsel Bill Neukom reiterated the company's view that a break up would not only be harmful to Microsoft and the economy but "most importantly to consumers".
The company plans to challenge the judge's findings and his final judgement, Mr Neukom said, adding that they were confident they would win during the appeals process.
At the close of trade on Wednesday, shares in Microsoft were $2.37 higher at $65.75.
The judge ruled in April that Microsoft had broken competition laws by abusing its market dominance.
His task now is to decide what to do to restore competition in the software industry.
Since then, the US Justice Department has submitted its proposal that the software firm be split into two separate companies.
Government lawyers want Microsoft to be split into a personal computer operating systems business and a separate applications software firm that would retain such assets as the Microsoft Office software suite and the Internet Explorer browser.
Microsoft has instead suggested that restrictions be placed on some of its business practices.
These restrictions could include not penalising computer makers who ship products with non-Microsoft software.
Judge Jackson had been expected on Wednesday to ask them to recommend a future course of hearings and depositions to help him reach a conclusion.