DoJ mum on Microsoft punishment

The US Justice Department is downplaying a report that says it is exploring the possible effects of splitting up Microsoft now that both sides in the software giant's antitrust trial have ended their testimonies.

The US Justice Department is downplaying a report that says it is exploring the possible effects of splitting up Microsoft now that both sides in the software giant's antitrust trial have ended their testimonies.

"We haven't retained anyone or any firm to analyse market impact of any option," said department spokeswoman Gina Talamona.

USA Today, citing unnamed sources at two investment banks, reported on Friday that Justice antitrust officials asked the banks to study the potential effects of dividing Microsoft. This possible remedy could turn the world's richest software company into a number of smaller companies with separate product lines; another possibility is the creation of a series of mini-Microsofts, all run by different executives. Both banks declined to help, according to the paper's sources.

Today a DoJ spokeswoman told The Standard that it has been consulting outside sources all along, but that it has neither paid anyone nor reached a decision about remedies in the Microsoft case.

The Justice Department, led by attorney David Boies, last month closed its case against Microsoft, alleging that the Redmond, Wash.-based software company used its dominant share of the operating system market to gain unfair advantage in other software markets, specifically Internet browsers. Both sides now await a decision from federal judge Thomas Penfield Jackson. No timetable has been set for his decision.

If Judge Jackson rules against Microsoft, the likelihood that he will exact a harsh penalty could be influenced by a separate lawsuit involving Microsoft and rival Sun Microsystems, according to one antitrust expert. In that case, Sun alleges breach of contract and unfair competition after Microsoft licensed Java technology from Sun.

"The DoJ made its case mostly on browser technology," says Rich Gray, an attorney with Bergeson, Eliopoulos, Grady & Gray in Silicon Valley. "If Judge (Ronald) Whyte in the Java lawsuit says, 'Here's another potentially threatening technology that Microsoft tried to undercut,' the DoJ could use that in the remedy phase."

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