Microsoft issues 'offer of proof,' attacks DOJ remedy proposal

Microsoft Corporation issued the final brief in its antitrust trial yesterday, effectively placing its fate in the hands of Judge Thomas Penfield Jackson, who is expected to release a ruling against the company later this week. Microsoft's filing attacks the U.S. Department of Justice (DOJ) and its plan to split the company into two separate entities as punishment for its illegal business practices. But the Microsoft filing also includes a separate "supplemental offer of proof" which offers the court a number of additional industry witnesses who would testify against a breakup. The offer is largely ceremonial, however, as the judge has already banned further testimony. Furthermore, critics say, the offer is somewhat bogus as one of the potential witnesses, Microsoft chairman Bill Gates, denied a request to testify in court during the original proceedings.

Unlike Microsoft's previous filing, however, the new brief offers some substantial suggestions that Jackson might want to consider. Ironically, some of its suggestions actually focus on the plan to breakup the company, which Microsoft calls a "divestiture": Though Microsoft doesn't believe that this action is justified, it has supplied line-by-line edits to the government plan just in case. "We are offering these edits with the obvious caveat that we do not believe that such an extreme and damaging remedy would be sustained by the appellate process," a Microsoft spokesperson said Wednesday. "Still, we may have to live with this in some form or another, and we want it to be as clear as possible."

One suggestion deals with government oversight of the two companies that would be created should Microsoft be split in half. A separate Office/applications company, Microsoft says, should require very little government intervention and should be free to operate as it sees fit. Microsoft doesn't want the two companies to be forced to store its internal emails, something that came back to haunt it during the antitrust trial, when email correspondence was used against it time and time again. And Microsoft suggests that any company that gets access to its Windows or Office source code should have to pay for that privilege: There's no reason for this to be free for one and all. Microsoft also opposes lower prices for versions of Windows that do not include bundled software, such as Web browsers and media players, stating that even disabled functionality "provides value." Finally, the company argued that many of the deadlines imposed by the DOJ should be extended significantly, while the time limit for its conduct restrictions should be lessened from ten years to four. "The forced breakup of a unitary company like Microsoft is unprecedented, and dividing the company in half would be an enormously difficult task," the filing reads.

In its critique of the DOJ proposal, Microsoft was particularly damning. "When an injunction is so vague and ambiguous that it 'defies comprehension' it is void and unenforceable," the filing reads. And the judge didn't escape the company's wrath either, as Microsoft complained that one day for hearings (last Wednesday) was completely insufficient: Microsoft had expected months of hearings for something as severe as a breakup of this magnitude. "It was Microsoft's position and understanding that the hearing on May 24, 2000 was to be the beginning--not the end--of proceedings on the issue of relief," the filing reads. Microsoft's complaints here will no doubt form the basis of its appeal, which will begin as soon as Jackson issues his ruling, regardless of what that ruling is.

For its part, the DOJ responded to Microsoft's filing in a statement. "This is another effort to posture for appeal," the DOJ says. "Much of Microsoft's submission is patently irrelevant to the question before the court. The filing does not come to grips with the fact that Microsoft has been found to have repeatedly engaged in serious legal violations, and serious remedies are required to restore competition and prevent similar violations in the future."

If you're interested in Microsoft's most recent filings, they are available on the company's Web site

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