DOJ Backs Away From Microsoft Breakup

Discussion in 'Use of the Law Forum & News' started by Legal Information, Sep 8, 2001.

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  1. Legal Information

    Legal Information Law Topic Starter New Member

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    The Department of Justice stated this week that it was no longer seeking to break up Microsoft into separate companies dealing with applications software and the Windows operating system. Rather, it plans to focus on more stringent and complex regulations to govern the software giant's current business practices and future endeavors.

    The rationale given by the DOJ for this sudden change in position was the desire to secure an effective remedy more expeditiously. Remedies proposed would include price fixing for Windows and severe constraints on the software giants ability to make deals with hardware manufacturers to bundle other Microsoft products (such as Microsoft's Flight Simulator with a Microsoft Joystick with a Dell Computer). Additionally, portions of the prioprietary Windows source code would be made available to software developers so as to eradicate the lead time that the company enjoys in implementing cutting edge changes to its applications appropriate to new versions of Windows.

    It is uncertain whether the actions of the DOJ can be interpreted as a concession of a Microsoft victory. Some question whether politics and campaign donations could have, in some way, this unexpected about face. Microsoft donations to the GOP, reported at $1.3 million in 2000, were approximately 50% greater than that donated to the Democratic party. The DOJ denied any such allegations and maintained that all decisions were made internally.

    The new remedies proposed by the DOJ, which Microsoft vehemently opposed last year, are of questionable effect and it remains to be seen how they can be practically implemented. Critics state that the version upgrades for Microsoft Windows XP and Office are merely revenue generating ploys in a weak economy for minor updates. In addition, the new pricing strategy that penalizes those who do not upgrade to XP within a short period of time seems to directly question whether such an offering would be palatable consumers in a market that would be free of an operating system stranglehold.

    A year after AOL was somehow able to avoid antitrust regulators and merge with Time Warner (and allegedly own and control over 50% of the worlds ISPs), the US government now seems to concede that consumers are actually better off with the superior Microsoft product in light of minor competetive disadvantages. Concurrently, millions of Microsoft Office and Windows 2000 users, who are quite satisfied with Windows and Office 2000, are pondering incredulously their dilemma in choosing to upgrade to XP now or pay a severe price later. Can the DOJ determine that the XP "upgrades" are worth nothing more than a minor upgrade cost? Almost forgotten are Microsoft's plans to include Microsoft's .net Internet service, graphics maintenance, CD-ROM burning software, and much more.

    Perhaps the operating system of a computer should soon virtually eliminate the need for all major applications. Bundling Internet Explorer seemed to make the Netscape Navigator giant disappear overnight, soon after the demise of some formerly popular word processing application called "WordPerfect." Is the DOJ spotting something critical that is evading public perception or should the public be questioning why it seems that the DOJ has been having such a difficult time in identifying the obvious?
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