Jackson could create 'Baby Bills'

In the week that Microsoft lost its antitrust case, we assess the implications of the ruling.

In the week that Microsoft lost its antitrust case, we assess the implications of the ruling.

There is still the prospect of Microsoft being broken up if Judge Penfield Jackson believes that a leopard cannot change its spots.

But more likely is a series of "future conduct" remedies that could order Microsoft to open up application programming interfaces that define how Windows interacts with other programs.

The judge could also limit Microsoft's freedom to set prices and conditions of use, as well as possibly preventing Microsoft building some Web features into Windows.

Jackson will have to put together a remedy to prevent Microsoft from using the monopoly that the company gained on the desktop to move into other markets.

Although Microsoft has moved beyond browser wars on the desktop to the Internet, there is compelling evidence that the company is already extending its "embrace, extend, eliminate" strategy to the Internet.

It may be that the most forceful way to restrain Microsoft's future conduct would be to break it up either horizontally - creating separate companies for operating systems, applications software and a consumer software division. To break up the company vertically, would be to create a series of smaller competing Micro-softs, dubbed "Baby Bills".

What might ultimately restrain Microsoft more than the Department of Justice is a series of inevitable private suits, which are likely to multiply in the wake of Judge Jackson's decision. That could see Microsoft crippled through years of litigation, like tobacco and silicon breast implant companies.

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