It's becoming increasingly clear that the once divided U.S. states and Department of Justice (DOJ) are now marching in lockstep, and if the latest reports are to be believed, it's bad news for Microsoft Corporation. According to independent reports in both the Washington Post and USA Today, the government will seek a breakup of the company as a result of the antitrust lawsuit that resulted in a decisive guilty verdict earlier this month. And while Microsoft has said repeatedly that it will appeal the verdict, the government is moving forward to provide Judge Thomas Penfield Jackson with its remedy recommendations. And while most analysts expected this proposal to seek conduct remedies that would prohibit the company from continually abusing its monopoly power, it now seems that a breakup of Microsoft Corporation will be suggested instead.
The proposed split would split Microsoft across product lines, with three separate companies resulting. The first would market a version of Windows that, interestingly, would be allowed to retain the bundled Internet software at the center of the trial. A second company would sell Microsoft's Office and applications products; this company would also have access to Internet Explorer. And a third company would be charged with the further development of MSN, IE, and Microsoft's other Internet-related products. The point of the product split would be to create two companies that could support other operating systems such as Linux and the Mac OS so that, for example, a version of Office for Linux could be possible. Likewise, Microsoft's Internet software could be made available for rival platforms, leveling the field for the competitors to Windows.
Because breaking up Microsoft will take at least two years, the government is reportedly going to ask the courts to impose "strict curbs" on Microsoft's business practices in the meantime. A Wall Street mergers and acquisitions firm has also been hired by the DOJ to develop potential breakup proposals, the Post report stated.
Microsoft, of course, remains violently opposed to such a breakup, and the company blasted the weekend reports. "There is nothing in the case that was brought that would merit such an unfounded remedy and one that is not in the interest of the industry or of consumers," a Microsoft spokesperson said this weekend. "It is difficult to know what's being floated as a trial balloon and what is something that all the parties will agree upon."
Perhaps, but splitting Windows from the collection of products that hang off it for life support may be the very solution that this company's transgressions demands. Would Microsoft's other products be so successful if they weren't buoyed by the Windows monopoly? We may soon find out