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Microsoft gets a break

It was business as usual for Microsoft, a company under legal siege for a number of years, in the wake of a U.S. appeals court decision in late June that both affirmed and reversed parts of U. S. District Court Judge Thomas Penfield Jackson's landmark ruling that Microsoft was an illegal monopoly that should be broken into three new companies.

In reaching its conclusion, the court cited indications of bias on the part of Judge Jackson. The court did rule that Microsoft had acted as an illegal monopoly. It also sent back the finding that Microsoft illegally tied the IE browser to Windows.

"We feel very good about .. the reversal of the tying claim," said Microsoft ompany Chairman Bill Gates.

"We have always said that we felt that a breakup was not going to happen," continued to Gates, who noted that the latest ruling is 'very clear on reversing the District Court in that area."

The decision to send the case back to a lower court seemed to end talk of a company breakup for now, although Microsoft may still face a stiff penalty. Following the ruling, Bill Gates said Microsoft was prepared to negotiate a settlement in the antitrust case instigated by the U.S. Dept. of Justice and 19 state attorneys general.

"The government's approach to this case has been flawed, and the proposed memory was flawed," said Simson Garfinkle, industry observer and author of Database Nation: The Death of Privacy in the 21st Century. Garfinkle said a company breakup similar to that applied to Standard Oil at the turn of the last Century rather than Jackson's breakup along individual product lines—would better foster competition. "This will certainly help .NET," Garfinkle said.

While not a total victory, the judgment opened the way for Microsoft to proceed deliberately with its plans to launch Windows XP and to further develop its .Net web services platform. Just before the appeals court ruling, Microsoft said it would remove controversial Smart Tag technology, which could link public web pages back to Microsoft sites, from the first release of Windows XP.

About the Author

Jack Vaughan is former Editor-at-Large at Application Development Trends magazine.

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