Microsoft break up unlikely

Many doubt that Microsoft will not be broken up

By BBC News Online's Kevin Anderson in Washington

The US Government has proposed that software giant Microsoft be broken up, but legal experts say there is little chance that it achieve its aim.

"A break-up is very, very unlikely," said Bob Lande, a law professor and anti-trust expert with the University of Baltimore.

He said companies rarely faced monopolisation cases, and in the rare world of such cases, break-up proposals were very rare.

A break-up is very, very unlikely

Bob Lande, anti-trust expert

In 1984, the government broke up telecoms giant AT&T, but that was easy compared to breaking up an integrated company such as Microsoft, Mr Lande said.

AT&T was a vertical break-up, spinning off regional local phone service subsidiaries. But the government is proposing a horizontal break-up of Microsoft.

A conservative judge

He also believes that Judge Thomas Penfield Jackson is unlikely to approve a break up.

"(Judge Jackson) is a life-long Republican. He is a Reagan appointee, and very few Reagan-appointed judges are liberal by any standards," Mr Lande said.

"He's a very conservative man, and conservative people don't like to break up companies."

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And, if Judge Jackson were leaning towards breaking up the company, he would not have tried to expedite the remedy process.

Judge Jackson gave Microsoft a 12-day window to respond to the government's proposed remedies.

Given such a fast-track time frame, "he is not thinking seriously about any break-up," Mr Lande said.

Long-term strategy

But he said the US Justice Department knew that achieving a break-up of the company was a long shot, adding, "this is a negotiating strategy."

The government was more likely to win the kind conduct-based remedies that it wanted if it asked for a break-up - what is called, in legal terms, a structural remedy.

But in addition to being a negotiating strategy, Mr Lande believes that this is a long-term strategy for the government.

"The government fully expects Microsoft not to adhere to any conduct-remedy imposed," he said.

Microsoft was legally able to evade a 1994 consent decree. Their lawyers were able to write loopholes into the agreement, he added.

"The government is afraid they will do it again. The government wants to be able to say, 'Back in 2000, we told you so,'" he said.

The government would use this as ammunition in future legal battles with Microsoft.

Uncertainty for Microsoft

However, one industry analyst said that Microsoft might gain by agreeing to a break-up.

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"Microsoft is in a tail spin until some kind of solution is arrived at," said Rob Enderle, an analyst with Giga Information Group.

"It will be increasingly difficult for them to compete and for them to hold on to employees. They have no control over their destiny," he said.

This lack of control meant they could not guarantee the features included in future operating systems for hardware or software partners, he added.

"It would be better if they allowed the break-up to occur," he said. Their future direction would become clearer, allowing them to return more quickly to normal operations.