UPDATED! Barely a day after Microsoft Corporation filed a last remedy response in its historic antitrust case, Judge Thomas Penfield Jackson issued his final ruling against the company, stating that the company should be split up along the lines suggested by the federal government. This would create two companies, one responsible for the Windows family of operating systems, and one for the remainder of Microsoft's products, including Office, Internet Explorer, and MSN. The 24-page ruling drips with angry language against the company, which the judge describes as "untrustworthy" and "not credible." In his ruling, the judge quickly dispenses with the company's remedy proposal and response to the DOJ, calling the company's "surprise" at a proposed breakup unbelievable.

"Microsoft's profession of surprise is not credible," the ruling reads. "From the inception of this case Microsoft knew, from well-established Supreme Court precedents dating from the beginning of the last century, that a mandated divestiture was a possibility, if not a probability, in the event of an adverse result at trial ... The Court's Findings of Fact gave clear warning to Microsoft that the result would likely be adverse, yet the Court delayed entry of its Conclusions of Law for five months, and enlisted the services of a distinguished mediator, to assist Microsoft and the plaintiffs in reaching agreement on a remedy of some description that Microsoft knew was inevitable. Even assuming that Microsoft negotiated in utmost good faith in the course of mediation, it had to have in contemplation the prospect that, were mediation to fail, the prevailing plaintiffs would propose to the Court a remedy most to their liking and least likely to be acceptable to Microsoft. Its failure to anticipate and to prepare to meet such an eventuality gives no reason to afford it an opportunity to do so now."

And with that damning of Microsoft's public posturing, the judge explains his ruling in language that is subtly absent of legal rhetoric. "Microsoft has been found guilty of antitrust violations, notwithstanding its protests to this day that it has committed none," the ruling continues. "The Court is convinced for several reasons that a final - and appealable - judgment should be entered quickly. It has also reluctantly come to the conclusion, for the same reasons, that a structural remedy has become imperative: Microsoft as it is presently organized and led is unwilling to accept the notion that it broke the law or accede to an order amending its conduct."

Jackson lists four key reasons why Microsoft must be broken up, rather than face a conduct remedy, such as a consent decree:

  1. Microsoft has never admitted that its business practices violate the Sherman Act. Jackson notes that "Microsoft officials have recently been quoted publicly to the effect that the company has 'done nothing wrong' and that it will be vindicated on appeal. The Court is well aware that there is a substantial body of public opinion, some of it rational, that holds to a similar view. It is time to put that assertion to the test. If true, then an appellate tribunal should be given early opportunity to confirm it as promptly as possible, and to abort any remedial measures before they have become irreversible as a practical matter."

  2. Evidence suggests that Microsoft, convinced of its own innocence, will simply continue to break the law as it conducts business as it has in the past. "Microsoft has shown no disposition to voluntarily alter its business protocol in any significant respect," the ruling explains. "Indeed, it has announced its intention to appeal even the imposition of the modest conduct remedies it has itself proposed as an alternative to the non-structural remedies sought by the plaintiffs." Analysts argue that this comment guaranteed a less lenient ruling, since the company made it clear that it would appeal any verdict, regardless of the outcome.

  3. Microsoft has lied to the Court in the past and there is no reason to believe that will ever tell the truth. "Microsoft has proved untrustworthy in the past," the judge writes. "In earlier proceedings in which a preliminary injunction was entered, Microsoft's purported compliance with that injunction while it was on appeal was illusory and its explanation disingenuous. If it responds in similar fashion to an injunctive remedy in this case, the earlier the need for enforcement measures becomes apparent the more effective they are likely to be."

  4. Jackson believes that continuing the trial, in an effort to find a form of remedy, will not yield a more effective remedy than the one that was proposed by the DOJ already. "As has been the case with regard to Microsoft's culpability, opinion as to an appropriate remedy is sharply divided," the judge writes. "There is little chance that those divergent opinions will be reconciled by anything short of actual experience."
Finally, the judge explains why the DOJ's remedy proposal is more realistic than that made by Microsoft. The "plaintiffs' proposed final judgment is the collective work product of senior antitrust law enforcement officials of the United States Department of Justice and the Attorneys General of 19 states, in conjunction with multiple consultants," he writes. "These officials are by reason of office obliged and expected to consider - and to act in - the public interest; Microsoft is not. The proposed final judgment is represented to the Court as incorporating provisions employed successfully in the past, and it appears to the Court to address all the principal objectives of relief in such cases, namely, to terminate the unlawful conduct, to prevent its repetition in the future, and to revive competition in the relevant markets. Microsoft's alternative decree is plainly inadequate in all three respects."

"\[The\] plaintiffs' proposed final judgment, as revised in accordance with the proceedings of May 24, 2000 and Microsoft's comments thereon, \[are\] entered as Final Judgment," the filing concludes

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