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Microsoft remedies as "radical" as break up

The next phase of the Microsoft antitrust case, to decide what remedies to impose on the software giant, could be as protracted and complex as the initial trial.

A status report jointly prepared by the US government and Microsoft was filed last week, calling for as many as 10 witnesses on each side and citing new documentary evidence on events in the PC industry since the trial.

"This essentially constitutes another trial just slightly pared down from the initial one," said Hillard Sterling, an antitrust expert at Chicago law firm Gordon & Glickson. "These remedy hearings are as complex as the overall trial on liability."

But both sides acknowledged in the court papers that settlement talks are ongoing. Microsoft is "working to resolve this case short of further litigation," said Jim Desler, a company spokesman.

The jointly filed report outlined the two sides' disagreements. The government wants to move swiftly, with hearings beginning in February 2002. But Microsoft wants a more complex, detailed process, which could delay the case well into 2002.

If Judge Colleen Kollar-Kotelly agrees with the government, remedies could be imposed on Microsoft sometime next spring. If the company were to launch an appeal and seek a stay of the remedies, Judge Kollar-Kotelly, citing this summer's unanimous Court of Appeals decision that Microsoft illegally used anticompetitive means to maintain a monopoly, could reject the request.

There is the possibility of an appeal to the Supreme Court, but at least one critic of Microsoft maintains that the decision by the US Department of Justice not to seek a break up makes it unlikely the high court will have much interest in the case. "Without a break up being part of it, I don't see the Supreme Court touching it," said Ed Black, president of the Computer & Communications Industry Association.

The government plans to model its remedy proposal after a series of business restrictions proposed by lower court Judge Thomas Penfield Jackson, who called for a ban on "adverse actions" by the company against PC makers supporting competing products. The proposed remedies also called for uniform Windows pricing and licensing terms, flexibility for PC makers to configure the desktop, and other measures. The government, however, said it could seek additional remedies.

In arguing for a longer remedy phase, Microsoft said Jackson's proposed remedies were "every bit as radical as the now-discarded proposal to break up the company". Earlier in September, the government dropped its plans to seek a break up of Microsoft. Justice Department officials argued that doing so would remove a perhaps impossible objective in favour of remedies aimed at curbing the firm's anticompetitive practices.

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