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Government lawyers said Wednesday that Microsoft’s opposition arguments to a breakup proposal were legally shoddy and riddled with semantic loopholes. They renewed their call to split the software company into parts to “remedy” multiple violations of federal and state antitrust law. The Justice Department, 19 states and the District of Columbia together urged U.S. District Judge Thomas Penfield Jackson not to give Microsoft any additional time to mount a renewed legal defense. “Microsoft’s proposal � is merely an attempt to delay the day when the law will hold it accountable for its illegal acts,” the government stated in a filing released Wednesday night. “Because Microsoft has demonstrated no legitimate need for the substantial delays and wide-open discovery it seeks, its various requests for them should be denied.” Tonight’s filing is another milestone in an endgame that has been running since April 3, when Jackson found Microsoft guilty of multiple violations of federal and state antitrust laws. The violations were due to a laundry list of business practices that the government alleged, and Jackson found, Microsoft to have engaged in for several years for the sole purpose of illegally protecting the company’s Windows operating system monopoly against threats from Netscape Communications, Sun Microsystems, IBM and other companies. On April 28, the government asked Jackson to split Microsoft into two companies, one for its Windows operating systems and one for everything else, including its Office suite of software applications and its Internet Explorer Web browser, and to subject the Windows company to a raft of conduct restrictions. Two states, Illinois and Ohio, dissented from the breakup proposal and asked Jackson simply to consider conduct restrictions. “It’s unfortunate but not surprising that the government has filed a document filled with rhetoric and mischaracterization in its effort to defend its extreme remedy proposal,” says Microsoft spokesman Jim Cullinan. “There remains no basis for these kinds of excessive and overreaching actions, which would harm consumers, the high-tech industry and the economy.” On May 10, Microsoft filed a brief telling Jackson that a breakup would be a drastic, legally unwarranted and hopelessly complex solution to the case. Instead, the company’s lawyers proposed that Jackson impose a tepid list of restrictions on its business practices for a four-year period. Microsoft also asked for up to several more months of unspecified new evidence discovery rights, depositions and witness testimony to mount a new defense. But Wednesday night, the government derided that request. “Microsoft’s violations have been established,” the government told Jackson. “Liability is not in doubt, and relief should be as prompt as possible. There is little in plaintiffs’ proposal that Microsoft can really say is unexpected.” The government reinforced the argument for its breakup proposal by pointing to the trial record and to excerpts from prior antitrust cases, including famous ones involving AT&T and Standard Oil. Government lawyers said breaking up Microsoft is not only a legally sound remedy, but it is also necessary to the health of software industry competition. The government said cleaving Microsoft was “the least burdensome means � of repairing the harm to competition and ensuring that similar antitrust violations do not occur in the future.” Responding to Microsoft’s argument that a breakup would be logistically difficult to accomplish, the government attached a stack of supporting exhibits showing that Microsoft regularly shuffles and reshuffles itself according to discreet product-line boundaries. In one exhibit, a February, 1999 e-mail between company executives Brad Silverberg and Ben Slivka, Silverberg laments internal cross-pollination fostered by Microsoft Chairman Bill Gates. Silverberg wrote in the e-mail that he told a reporter, “there are three things you can count on in life at msft: death, taxes, and another reorg.” Slivka wrote: “If steveb doesn’t do something radical with this reorg, I think I’m going to take 6 months off and then do a start-up.” Silverberg responded by saying, “steve needs to do something so that the company ends up with an org that essentially is a separate company within the company. � I simply do not want to spend my life in meetings struggling with the internal issues, getting pissy mail from billg saying the portal should be windows online so I can check my available bug fixes 10x a day.” Slivka responded by wondering “if bill/steve want a lot of us to just leave.” Silverberg also mused to Slivka about Steve Ballmer’s and Bill Gates’ efforts to get Silverberg to rejoin the company after an extended leave of absence. “I have wondered whether steve’s attempt to get me back has been genuine, and even more so with bill,” Silverberg wrote. “With bill, I believe he wants me back but not the me who I really am but rather a version of me who would the obedient soldier (and do all the wrong things!)” Silverberg rejoined Microsoft, but both he and Slivka have since quit the company. Taken together, the message string is a clear sign that months of courtroom embarrassment at the hands of the government’s lead trial counsel, David Boies, weren’t enough to make company employees stop their indiscreet use of e-mail to complain to each other. In Wednesday’s filing, the government also dissected Microsoft’s counter-remedy proposal, calling it “grossly inadequate on its face.” Government lawyers noted that Microsoft’s May 10 proposal lacked any prohibition on either technological or contractual tying of Internet Explorer to Windows. The government said that nothing in Microsoft’s counter-proposal would “limit Microsoft’s use of other retaliatory or coercive devices, such as withholding or threatening to withhold needed technical information or support or other consideration or imposing punitive price increases.” The stage is now set for the next act in the case, a May 24 courtroom hearing in which the two sides are expected to reprise their recent filings. So far, neither side has yielded any ground since Jackson’s April 3 ruling. Now Jackson will have to listen to two sets of stubborn lawyers argue wildly divergent legal positions before he decides how to proceed. Jackson could order a break up right away, but most legal observers expect him to be sufficiently mindful of the appeals court to give Microsoft some additional time to renew its defense should he leave the prospect of a breakup on the table. Related Articles from the Industry Standard: Pro-Microsoft Group Decries DOJ Breakup Plan Microsoft: Breaking Up Would Be a Radical Thing to Do Special Report: Microsoft Ruling Copyright � 2000 The Industry Standard

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