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US will not pursue break-up of Microsoft 
Thursday, September 06 2001
by Stan Van Haasteren


The US Department of Justice's Antitrust Division announced on Thursday that it
will not seek to break up Microsoft in its ongoing antitrust action against the
company.





The Department said it was abandoning the effort at a company break-up in order
to obtain "prompt, effective and certain relief for consumers."



The announcement came after the District Court ordered the Antitrust Division and
Microsoft to produce a joint status report outlining proposals for further
proceedings in the case.



The District Court had earlier ruled that Microsoft had engaged in exclusionary
conduct intended to maintain its monopoly in the market for PC operating systems.
The Court of Appeals upheld this decision in June but reversed the District
Court's ruling that Microsoft had unlawfully tied its Web browser to its
operating system.



The Justice Department said it would not pursue the question of whether Microsoft
was illegally tying its products, arguing that doing so "would only prolong
proceedings and delay the imposition of relief that would benefit consumers."



The break-up of the company was first ordered more than a year ago by trial judge
Thomas Penfield Jackson, but Jackson has since been removed from the case and his
conduct, including comments to reporters, were labelled inappropriate by the
appeals court.



Kevin McConnell, senior equity analyst at Bloxham Stockbrokers, said the
Department of Justice announcement on Thursday was not a surprise.



"It was pretty much expected that the Bush administration would be more
friendly to the Microsoft case," he said. "There was very much a change in the
way the case was handled when the administration changed."



McConnell also reckoned that the European Union, which has its own antitrust
investigation into Microsoft, will not pursue Microsoft as vigorously following
the decision by the US Department of Justice.



"I wouldn't say Microsoft is out of the woods in Europe, but it's certainly in
a better position than it would have been," he said. "It probably looks better
for them in Europe now that this decision is public, but don't expect Europe to
bend over right away."