Word: doj
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...irony of the past week's convoluted maneuverings is that each side in the biggest antitrust case in two decades knew where its counterpart stood well before the conflict's looming D-day--Microsoft's May 15 deadline for giving its new operating system, Windows 98, to PC manufacturers. DOJ antitrust chief Joel Klein believed that the ways Microsoft uses its Windows monopoly to dominate other markets violate antitrust law, and that the company had to be reined in lest it gain a choke hold on the Internet. Gates felt otherwise, and had long since made it clear that...
...when the DOJ suit was postponed, the state attorneys general who convened at the Justice building were naturally curious to learn why. Klein explained that Gates had called the night before, offering what appeared to be real concessions, including easing restrictions on what PC makers could put on their opening screens. That hardly squared with Gates' longtime obstinance on such matters, but Klein, whose sensitivity to politics and diplomacy would have made him a standout at the State Department, was willing to go the extra mile just in case. The states, however, were determined to maintain strategic independence...
Thus was set the pattern of two tortured days of talks among the three parties in this complex dance: Justice trying to cover every last base before launching one of the biggest antitrust actions ever; Microsoft hoping to learn as much as possible about the DOJ's case without actually surrendering any serious ground; and those state attorneys general, who at the Monday press conference distributed bios along with their press releases, clearly relishing their role as Joel Klein's conscience. "Quite frankly," Vacco confides, "until last week we weren't 100% sure the Department of Justice was going...
...issue, of course, is the line between what Bill Gates can and cannot legally do with Windows, his de facto operating-system monopoly. Klein's team has spent the past year amassing what the DOJ clearly considers persuasive evidence that the software giant's behavior--from restrictive licensing arrangements with its so-called PC allies to me-only marketing deals with Internet service providers and websites--violates the venerable Sherman Act, the bedrock of U.S. antitrust law. Sherman, in essence, says it's O.K. to achieve a monopoly, but not to use one to wedge your way into other lines...
...fact that when push came to shove this spring, Gates suddenly started tossing out concessions like bonbons, however, tends to suggest that deep down he's known all along things aren't quite that simple. The past few weeks have been tough on Microsoft. Everyone from the DOJ to foreign governments to a growing band of state attorneys general stood ready to take the company to court. Its latest bumbling p.r. gambit--trotting out computer-industry execs like windup toys to halfheartedly raise the specter of widespread economic disaster should Win 98 be delayed, even for a matter of months...