Word: microsoft
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Adding weight to that theory: the curious timing. The putative explanation for the government's thinking is that, with the case due for an in-court status hearing this week, Justice wanted to give Microsoft an idea of what would be on and off the table. But after that hearing, the case is headed into settlement talks, and it's Negotiation 101 to hold onto all your bargaining chips until you get to the table. Why abandon, in exchange for nothing at all, the one scenario Microsoft fears the most...
...Microsoft's critics are grumbling that politics and payola may have played a role. They point to the company's newfound interest in campaign finance, notably the $2.5 million Microsoft contributed to President Bush and the Republicans in the 2000 election cycle. The Bush Administration took the unusual step of letting it be known that it is not second-guessing the judgment of Charles James, the recently appointed head of the Justice Department's antitrust division. (In a Senate hearing last week, Justice also disputed charges that it was politically motivated in its attempts to settle the $20 billion lawsuit...
Justice, for its part, insists it is fully committed to pursuing Microsoft, which, after all, even a Republican-dominated federal appeals court has now branded a monopolist. The department gave up on the breakup and the tying claim, it said in a statement, "to streamline the case with the goal of securing an effective remedy as quickly as possible." In fact, both of the now abandoned issues would have required the production of piles of evidence, followed by lengthy hearings. Adding credibility to Justice's explanation are the 18 state attorneys general, parties to the suit, who followed the Federal...
Trying to break up Microsoft was always an uphill battle--it's an extreme remedy under antitrust law. But dividing a company has the practical advantage of being self-enforcing. "One of the pluses of a split is that it is far less intrusive in the long run than a long consent decree," says Salil Mehra, a Temple University law professor and former antitrust-division lawyer. Two newly created Baby Bills would have had an economic incentive to act competitively, meaning that the market would guard against future monopolistic activity. Conduct remedies, by contrast, require a court to monitor...
Which is just what Microsoft's critics are worried will happen. This case started when the government took Microsoft to court in 1997 for violating a prior consent decree. Some in the tech industry say this is what Microsoft will probably do again. "The government made a decision a year ago that it needed a structural remedy," says Edward Black, CEO of the Computer & Communications Industry Association and an outspoken Microsoft critic. "If anything, Microsoft's market dominance has only gotten worse since then...