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VNU Net: Microsoft punishment expected this week

Apr 25, 2000, 21:46 (6 Talkback[s])
(Other stories by John Geralds)

[ Thanks to Kevin Reichard for this link. ]

By John Geralds, VNU Net

US regulators are close to recommending that Microsoft be split into two and a proposal is expected to be announced early this week, according to US reports.

Under the recommendation, Microsoft would be forced to split off the Windows operating system from the rest of the company. The Windows business would be permitted to include functions to browse the internet, while the second company would sell Microsoft software applications, including Word and Excel.

But if a decision is made to split the company into three, the third would target the internet with Explorer and MSN, the Seattle giant's web portal and ISP that competes with America Online (AOL), among others.

Federal officials have been working on a remedy recommendation since Judge Thomas Penfield Jackson ruled that Microsoft had abused its monopoly position in the software market.

While it is unclear whether the US government has signed off any proposal, sources said Attorney General Janet Reno has already been briefed on the Department of Justice's (DoJ's) proposal.

Microsoft said it would vigorously fight any plans to split up the company and chief operating officer Bob Herbold, told journalists that such a ruling would be "inappropriate."

He said Microsoft would fight any penalty through the appeals process. "We think any discussion around remedies are completely inappropriate. They don't match what's going on in the marketplace," he argued.

Although the company plans to challenge a breakup, David Readerman, an analyst at San Francisco investment bank, Thomas Weisel Partners, said: "If it gets Joel Klein [DoJ Assistant Attorney General] and Judge Jackson completely out of [Microsoft's] business, it might be a fair trade."

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