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Microsoft, Justice Department
in court for remedy hearing
■ In a battle of two behemoths, the government wants to
split Microsoft into two companies, but the software
enterprise is arguing for a less severe punishment
By Eun-Kyung Kim
The Associated Press
WASHINGTON — Microsoft
returns to court Wednesday, hop
ing to get an indication of how se
riously a federal judge is consid
ering a government plan that
would break up the software gi
ant as a remedy for breaking the
law.
Microsoft will face a bevy of
government attorneys during a
hearing scheduled before U.S.
District Judge Thomas Penfield
Jackson, who oversaw the 78-day
antitrust trial in a case brought by
the Justice Department and 19
state attorneys general.
Last month, Jackson ruled that
Microsoft violated federal an
titrust law by using illegal meth
ods to protect its monopoly in the
computer operating systems. The
company also tried to expand its
dominance into the market for In
ternet browsers, the judge found.
Microsoft plans to appeal the rul
ing.
The hearing Wednesday is in
tended to help Jackson determine
the best remedy to impose against
Microsoft to restore competition
in the software industry.
The Justice Department, along
with 17 of the 19 states, is urging
Jackson to split Microsoft into
two companies. One would de
velop the Windows operating sys
tem, which dominates the per
sonal computer market
worldwide and was found by
Jackson to be the source of Mi
crosoft’s monopoly. The other
company would run everything
else Microsoft operates, including
its Office software and Internet
services.
Microsoft believes the govern
ment lacks a basis for its pro
posed breakup. The Redmond,
Wa., -based company has asked
Jackson to summarily dismiss the
government proposal, or at least
give its attorneys up to six
months to prepare a legal defense
against such a “severe” punish
ment. Microsoft also has offered
numerous milder penalties in its
place.
On Wednesday, each side in
the case will get about two hours
before the judge to argue its case,
with attorneys for the Justice De
partment going first.
Legal antitrust experts expect
Jackson to grant Microsoft some,
but not all, of the additional time
it wants.
“What the government is re
questing is the restructuring of
what may be the world’s most im
portant company,” said Bill Ko
vacic, an antitrust expert at
George Washington University.
“Is it worth taking a few addition
al weeks, maybe a couple of
months, to get that right? I think
he (Jackson) will conclude that it
is.”
What other actions the judge
may take is uncertain. When he
originally sketched out the cur
rent timetable, Jackson indicated
that he hoped the hearing would
wrap up the remedy phase of the
case, and he would “simply write
his own order shortly after that,”
Kovacic said.
“I think what we’ll principally
see now is the debate about how
much more time this should take,
and what specific activities the
judge should authorize,” he said.
Jackson may also show signs of
his willingness to accept the gov
ernment’s breakup proposal,
many experts believe.
“Whether he’s open to a struc
tural remedy — I would expect
Jackson to give some indication of
how he’s leaning,” said Bill Ko
lasky, who heads the antitrust di
vision of a Washington law firm
hired by a pro-Microsoft trade
group.
Kovacic agreed.
“I think he has to indicate
whether it is a genuine candidate
or whether he’s willing to dismiss
that out of hand,” he said.
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US. gun sales abroad
will have fewer strings
■The government decides
Tuesday to make it easier
for other countries to buy
U.S.-made weapons
By Barry Schweid
The Associated Press
WASHINGTON — The Penta
gon and State Department an
nounced jointly on Tuesday an
easing of restrictions on the sale
of U.S. munitions abroad.
In some instances, a single li
cense will cover an entire
weapons program involving sev
eral subcontractors. And the li
censes will be valid for eight
years, not the current four years.
The new rules apply to deals
with the NATO allies, Japan and
Australia. Secretary of State
Madeleine Albright is due to
make an announcement Wednes
day at a meeting with allied for
eign ministers in Florence, Italy.
It also applies to joint ventures.
American companies will be
able to compete more effectively
with European firms and are en
thusiastic about the changes, offi
cials told reporters at the State
Department.
The new regulations also will
make it easier for the allies to
share equipment in conflicts such
as the one in Kosovo. U.S. forces
found licensing restrictions
sometimes stopped them from
providing allies with American
technology, the officials said.
In some instances, licenses will
be issued within 10 days. Compa
nies cleared for a project may not
have to be licensed for a second
one under the new rules.
The officials said controls on
allies’ transfer of U.S. weapons
and technology to other countries
would be tightened under the
new arrangement.
At the same time, though, a list
of so-called third countries eligi
ble to receive U.S. technology
will be drawn up.
NATO, Australia and Japan ac
count for more than $17 billion,
or 68 percent, of U.S. export li
censes.
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