WASHINGTON -- A prominent trade group in the technology industry,
traditionally loath to involve the government in its business, is
endorsing in a secret report the breakup of Microsoft if the company
loses its landmark antitrust case.
It's unclear how the proposal might affect government lawyers,
are pondering what to do about the software giant as the trial moves
into the final stages -- with the growing likelihood of an eventual
ruling at least partly against Microsoft.
Outside the bitter courtroom fight, there is genuine apprehension
in Washington about tinkering with the awe-inspiring success of a
company that employs 27,000 people, recorded $14.4 billion in sales
last year and whose Windows software runs most of the world's
The Software and Information Industry Association made its
recommendations in a report sent to Justice Department lawyers after
a vote by its board.
The group proposes what some legal experts call the "death-
penalty" for Microsoft if it loses -- splitting it up into companies
selling separate products, such as Windows software and Internet
content, or breaking it into three or four "Baby Bills" or "Mini-
Microsofts" each with identical products.
The group said a breakup "deserves the most careful attention of
the government and the court." But it doesn't distinguish which
breakup plan it recommends, calling it "ultimately an antitrust
policy question with no clear answer."
Microsoft says it is premature to consider choices it could face.
Spokesman Greg Shaw called the described remedies "little more than
wishful thinking by our competitors."
If the government prevails, its once-bitten lawyers will be
mindful of their own previous, failed efforts to muzzle Microsoft.
Just a few months after Justice last forced Microsoft to agree to
tone down its aggressive behavior, Bill Gates met with executives of
a business ally who asked him about his apparently uncharacteristic
"This antitrust thing will blow over," the company's billionaire
chairman answered, according to the meeting's notes. "We haven't
changed our business practices at all."
That 1995 consent decree, endorsed by the same judge in the
ongoing trial, didn't stop Microsoft from bundling its Internet
software into Windows, a central issue in the current case.
The 1995 agreement instead focused on encouraging competition for
operating systems. But it's clear that Microsoft was more worried,
by then, about the Internet's emerging threat.
"It was closing the barn door after the horse was down the road in
another city," quipped Richard Gray, a California antitrust lawyer. …