Representatives of Microsoft Corporation confirmed Tuesday that the software giant will ask Judge Thomas Penfield Jackson for a time extension in the discovery phase of its antitrust trial, which will probably begin late this month. The company would like to extensively review the government's plan to breakup Microsoft so that it can build an appropriate defense. Next week, Microsoft will present Jackson with its own remedy proposal, and the remedy hearing was due to begin May 24th. But if Microsoft gets its wish, the hearing could be postponed to as late as the fall. And while it's highly likely that Jackson will back the government's plan to split Microsoft into two companies as punishment for its antitrust violations, it's equally likely that he will grant Microsoft the time it needs to counterattack a remedy this serious.
"We have not started even looking into the details of their proposal," said Microsoft spokesperson Jim Cullinan. "We are going to state our objections to it and propose our remedy, and we are going to look ahead to the process. There could be hearings and witnesses with examination and cross-examination."
For its part, the Department of Justice (DOJ) says that Microsoft is attempting to delay the inevitable, as it already has all of the documentation used by Justice to reach its proposal. The DOJ says that Microsoft should only need two or three weeks to gather information. However, Microsoft explains that Justice refused to understand the economics of the situation, that the company's close ties between Windows and Office were what made these products successful in the first case. Of course, this was the exact argument that AT&T made before it was split apart by the federal government. And in the ensuing years, competition, choice, and lower prices has returned to the phone industry with a vengeance, a situation the DOJ offers as a proof of concept for its plan.
But Microsoft argues that this case is unique from the AT&T breakup. "Never has there been a litigated antitrust case at the end of which a federal court has been asked to order the divestiture \[of a portion of a company\]," Neukom says, referring to the split of Windows from the rest of the Microsoft software empire. In previous antitrust battles, companies were split along clear product lines, while Microsoft, some argue, creates a unified set of products that is difficult to divide. The government disputes this, noting that Microsoft's own internal organization mirrors the very split that they are attempting to product. Regardless of the outcome of the trial, Microsoft may have to face a very real problem in the short term: If the government wins its bid to limit the company's business practices during the appeals process, products such as Windows Me might simply not get released. Windows Me bundles a number of questionable products, such as Internet Explorer 5.5, Windows Media Player, MSN Messenger, and Movie Maker, which the government describes as competition-stifling "middleware," software that shouldn't be included with a monopoly operating system. If the government is able to win an injunction against Microsoft, it might prevent the company from releasing Windows Me in its current state. That might force Microsoft back to the drawing boards, so that it might excise these products from Windows Me or simply not release the product at all.
"We couldn't have developed Windows without \[the\] so-called middleware," says Microsoft chairman Bill Gates. However, Microsoft might be able to sell Windows Me and abide by a court order simply by providing an easy way to remove these components from the product. That way, users that didn't want IE, Windows Media Player, or any of the other affected products could simply remove them using the Add/Remove Programs applet in Windows Me's Control Panel. And PC makers would be able to offer a version of Windows Me at a discount, one that didn't include the code for all the bundled middleware. This would give users a choice, but still preserve the Windows Me "vision" that Microsoft developed when it was planning the product. But Microsoft is likely to fight such a ruling tooth and nail, as it has done at every step of the way