A software trade group would favor breaking up Microsoft, if the company loses its landmark antitrust case, because the remedy would
involve less
governmental oversight in the long term, according to a report submitted to
the Justice Department in February.
The Software and Information Industry
Association said in the 57-page report that it takes no official stance
on what remedies ought to be imposed on Microsoft if it loses. But the group,
which represents 1,400 software and content companies, made clear it would
prefer "structural" remedies in which Microsoft is broken up over
court-ordered prohibitions on specific business conduct.
"SIIA concludes that a structural reorganization of Microsoft can avoid the
drawbacks associated with conduct-based, behavioral relief, preventing future anticompetitive leveraging, and creating a self-executing
remedy that avoids unnecessary dislocations to Microsoft's shareholders and
equity markets," the report contends.
Microsoft spokesman Tom Pilla called the suggestion "old news," and out of
touch with the majority of companies in the computer industry.
"The discussion of remedies is premature and frankly a PR stunt designed to
divert attention away from the real issues in this case," said Pilla. "If
you look at other industry organizations you'll find that there's almost no
support for these remedies."
Pilla pointed to a survey
by the pro-Microsoft Association for Competitive
Technology that found that a majority of computer executives, including
many members of SIIA did not approve of breaking up Microsoft.
The SIIA report, whose existence was first reported
last month, also suggests that the court consider other remedies. They
include:
• requiring Microsoft to disclose the source code to its Windows operating
software,
• compelling Microsoft to license Windows to anyone,
• prohibiting Microsoft from charging customers differently for Windows, and
• banning the bundling of Windows and the Internet Explorer browser.
But the SIIA, which was formed when the Software Publishers Association
recently merged with the Information Industry Association, is leaning
toward structural remedies, arguing that they "effectively cure--once and
for all--the competitive crisis plaguing the software industry." The
Software Publishers Association has long been a supporter of the
government's antitrust case against Microsoft.
"The most significant advantage of a structural remedy is the significant
reduction in the amount of ongoing government involvement necessary to
restore competition to the marketplace." The report is more ambivalent about
how Microsoft should be broken up.
Under one proposal, Microsoft would be divided "horizontally" so that its
operating system, applications, and Internet content divisions are separated into separate companies. Under a separate proposal, however,
Microsoft would be broken up "vertically," into two or more companies.