VNU Net: White House briefed on Microsoft’s fate

By John Geralds, VNU
Net

Top US Justice Department antitrust officials briefed a White
House team for about two hours yesterday on its proposal to break
up Microsoft, although neither President Clinton nor Vice President
Gore took part.

White House spokesman Jim Kennedy said the Justice Department
provided an informational briefing to the president’s economic team
and said he does not expect administration officials will try to
reshape the proposed remedy.

This represents the first time the White House has been
directly involved in the Microsoft litigation since analysts
reviewed the economic significance of the case last year.

Antitrust chief Joel Klein lead the briefing which included
Treasury Secretary Lawrence Summers, National Economic Council
Director Gene Sperling and Chairman of the Council of Economic
Advisers Martin Baily, along with White House lawyers.

Summers told reporters: “At this point what is being discussed
is an economic issue. There is a feeling that it is appropriate to
have a briefing on issues that clearly have important economic
ramifications.”

Shortly before the session, Microsoft president Steve Ballmer
said he was confident that the software giant would eventually win
the case and that it would not be broken up. “No matter what the
newspaper headlines say, absolutely nothing in the current case
justifies breaking us up,” he said.

The federal proposal is believed to recommend carving the
software giant into two companies: one that sells Microsoft’s
dominant Windows operating system, and another that sells its
widely used Office software. US government officials acknowledged
that such a remedy would be imposed only if US District Judge
Thomas Penfield Jackson agrees, and only after an appeals court
review.

A Microsoft spokesman said if these leaks and rumours were
accurate, “this would represent radical and extreme government
regulation of one of the most dynamic and competitive industries in
the world”.

Meanwhile, Microsoft chairman Bill Gates ignored the unpleasant
issues to tout the PC’s future at the Windows Hardware Engineering
conference yesterday. Gates discussed Microsoft’s plans to ready
its Windows platform for a wireless, broadband computing
future.