Microsoft Accepts ‘Common Sense’ Restrictions

Reports suggest that Microsoft Corp. (Nasdaq:MSFT) will formally reject the Department of Justice’s (DOJ) plans to break up the company, saying that the requirement is a “regulatory death sentence.” Today’s Wall Street Journal (WSJ) said, however, that Microsoft is willing to concede on other points, acceding to “common sense” restrictions on its conduct to meet the DOJ’s antitrust claims.

In its defense against DOJ and European Union (EU) investigations, Microsoft has consistently argued its corner by saying that although it enjoys healthy sales of its operating system and allied software, its hold on the market is not a monopoly.

However, the WSJ said that Microsoft may now be climbing down off its defensive high horse and is prepared to meet regulators on middle ground.

Return to Court

The WSJ, citing an e-mail to Congress on Friday, said that the software giant will return to federal court next week for the closing arguments in its long-running antitrust case.

The paper said that a “commonsense” settlement will be made in the next few days. It noted, however, that “without a substantial shift by one side or the other, the talks are not likely to produce an agreement before the two sides return to court for the trial’s final round.”

As Newsbytes reported this week, a pair of Democratic senators are now encouraging the DOJ and Microsoft to reach a settlement on the case.

In a letter to Attorney General Janet Reno and Microsoft President Steve Ballmer, Democratic Senatorial campaign committee chairman Robert Torricelli, (D-New Jersey), asked the two to resolve the matter in a way that “would be in the best interests of consumers, the industry and our nation’s global leadership in technology.

“In my view, it is critically important for both sides to avoid extreme positions, such as proposals to break up the company, and instead work together to reach a balanced settlement,” Torricelli wrote. “The potential risk to the economy and consumers of such extreme steps would far outweigh any benefits.”

In a statement to that same effect, Senate Minority Leader Tom Daschle, (D-South Dakota), said the two parties should end the dispute before events catapult the situation beyond the point of no return. “I agree with the view that both consumers and the industry would benefit from a fair resolution of this case and believe the current mediation provides both parties a unique opportunity to resolve this dispute in a way that strikes a balance between the importance of our antitrust laws and innovation,” he said.

Any Number of Sanctions

If the court ultimately finds for the government, the judge in the case could impose any number of sanctions on Microsoft. Possible sanctions could include a breakup of the software giant into separate entities to handle its Windows and Microsoft software products, such as word processing and spreadsheet programs.

Another solution that has been discussed — and could well be a likely settlement option — would be to force the company to disclose its “source code,” a move that could encourage competition by allowing other software makers to develop their own versions of the popular Windows operating system.