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Friday, 26 May, 2000, 20:12 GMT 21:12 UK
US reaffirms plan for Microsoft split
Windows might become a separate company
Windows might become a separate company
The US Department of Justice has reaffirmed its proposal that Microsoft, the world's biggest software company, should be broken up into two in order to ensure greater competition.

The Microsoft Trial
Judge Thomas Penfold Jackson has already ruled that Microsoft has acted illegally as a monopoly, and is now discussing how to remedy the situation.

Microsoft has already rejected the proposal for a break-up, and said it would appeal against any unfavourable decision.

The government called the latest Microsoft plan "a cynical ploy calculated to raise diversionary issues on appeal."

The US government document is its final version before Judge Jackson makes a ruling, which could come as early as next week.

Microsoft will have until Tuesday to present its final rebuttal of the proposal in writing.

The company also announced that it would be delaying a major strategy announcement on the next generation of its software because of the court case.

Radical plans

The judge appeared to favour an even more radical break-up option when the parties met in court on Wednesday.

He praised another court brief that suggested the company should be broken up into three separate companies.

Under the government's plan, which was presented in the form of an order the government could sign, Microsoft would be split up into one company that sold the Windows operating system, and another that sold everything else, including the Microsoft Internet Explorer that was at the heart of the anti-trust complaint.

David Boies, the lead attorney on the case for the government, told the judge at the time that while a three-way plan was interesting, it would require more time and effort to split the company into three.

The government argued that a two-way split would be quicker and easier to implement while still achieving the desired result of more innovation and freedom in the marketplace.

The US government charged, and the court accepted, that Microsoft forced its customers to adopt its own browser by discounts and pressure on computer makers, to the detriment of rival software maker Netscape.

On to the Supreme Court?

Judge Jackson appears to want to move quickly to bring the case to resolution.

But there could be years of appeals before the final judgement takes effect.

There is some speculation that the case could be referred directly to the US Supreme Court.

The Department of Justice might ask that the case be heard immediately by the US Supreme Court, which would keep the case out of the hands of an appeals court sympathetic to the company, anti-trust expert Bob Lande told the BBC.

Governor George W. Bush, the likely Republican candidate for President, has expressed sympathy for Microsoft and suggested that he will revamp the anti-trust division of the Justice Department.

Microsoft shares hit a 52 week low of 61 7/16.

The market value of the company has declined by $300bn in the last few months.

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See also:

18 May 00 | Business
Microsoft break up defended
04 Apr 00 | Business
Microsoft vows to fight on
04 Apr 00 | Business
Analysis: Ruling a distraction
11 Apr 00 | Business
Microsoft on Bush offensive
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