2008 Woodie Awards
Microsoft breakup dropped
Administration abandons efforts
Issue date: 9/7/01 Section: Front Page
WASHINGTON (AP) — In a dramatic shift, the Bush administration on Thursday abandoned the Clinton-era effort to break up Microsoft. It suggested a lesser antitrust penalty that could still force changes to the company’s new Windows operating system.
The Justice Department also dropped charges that the software giant illegally hurt competitors by tying or bundling separate features, like a Web browser, to its flagship computer operating system.
Microsoft had hotly contested those charges because the company’s strategy calls for integrating more new features into products like the new Windows XP operating system, due in stores next month.
Officials said the legal shift was not an overture to Microsoft to settle. They suggested the government will ask the new judge handling the antitrust case to review the Windows XP software and seek a penalty that ensures the company doesn’t operate as an illegal monopoly in the future.
But the news that reverberated from Wall Street to Silicon Valley was the decision to stop trying to break up an American corporate icon that helped fuel the technology revolution of the 1990s.
The 19 states that joined the government in suing Microsoft and seeking its breakup acquiesced, saying an appeals court decision earlier this summer would make a breakup more difficult to pursue.
“This is an industry that moves incredibly fast,” said Iowa Attorney General Tom Miller. “The case has gone on for quite some time now. It was time to move as quickly as we could to remedy.”
Microsoft reacted with cautious optimism. “We remain committed to resolving the remaining issues in the case,” spokesman Vivek Varma said.
Investors, however, showed some concern that the penalties the Bush administration will seek might still affect or delay next month’s planned debut of Windows XP — which many on Wall Street hope will help invigorate the sluggish technology industry.
Microsoft shares finished the day down $1.72 at $56.02 per share.
Be sure to include your name, major, and class year. Submissions without this information are subject to deletion.
By submitting a comment, you agree to thebatt.com's Terms of Use.
You may also send a Mail Call to The Battalion at mailcall@thebatt.com