DoJ rejects most MS changes

The US DoJ rejected most changes proposed by Microsoft to its breakup proposal as they would endanger attempts to minimise the company's anti-competitive behaviour

In what is expected to be their final filing to the judge deciding the Microsoft antitrust case, the DoJ and 17 state attorneys general agreed to call the plan a "divestiture" rather than a "reorganisation," but they also asked the judge to ignore wording changes they claim would allow Microsoft to discriminate against computer makers and damage industry competition by withholding technology.

In rejecting the edits, government attorneys said the proposed changes "would create loopholes and permit Microsoft to continue to engage in anti-competitive practices like those found by the Court."

US district judge Thomas Penfield Jackson has already ruled Microsoft a monopolist that broke the law by leveraging its market dominance to thwart competition and strike illegal contracts.

During the past few weeks, Judge Jackson has given both sides chances to tweak a DoJ proposal to split the company into two parts -- one that would sell applications and one that would sell the operating system. Jackson could issue his ruling as early as this week, although Microsoft has vowed to appeal the case.

In its filing Monday, the DoJ agreed with a Microsoft request to use the word "divestiture" rather than "reorganisation," one of the many suggestions the company made in a wide-ranging list of edits filed last Wednesday.

However, the DoJ refused to tinker with much of the conduct-restriction section, rejecting Microsoft edits that would have given the newly separate companies more leeway in interacting with each other and allowed control over technology the DoJ wants the company to make public.

It also rejected a Microsoft request for an entire year to propose a divestiture plan, sticking with its original proposal of four months.

Government attorneys warned the judge that the company was trying to slip in wording that would allow it to continue to punish computer makers who do not do as it says. In the filing, the DoJ also urged the judge to leave out Microsoft-proposed wording dealing with APIs.

Government attorneys said the changes regarding APIs and other internal technology would undermine the final judgment by allowing Microsoft alone to dictate who can develop applications that work with its operating system instead of allowing market competition.

"The changes would thereby enable Microsoft to frustrate the purposes of the final judgment by hampering interoperation of competing middle ware product with the operating system," the filing stated.

The DoJ originally proposed breaking up the company in a filing in late April. Then, during a hearing in May, Jackson invited the DoJ to resubmit its proposal, this time with some minor revisions. Last week Microsoft made some of its own edits to the document and will have one more chance to comment on it in a filing Wednesday.

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