U.S. Govt. Drops Efforts To Dismantle Microsoft; Seeks Other Penalties

After waging a four-year legal battle against Internet and computer-software giant Microsoft, the Justice Department announced that it will no longer seek to break up the company and wants to end the historic antitrust case against Microsoft as soon as possible.

Assistant Attorney General Charles A. James, the new head of the Justice Department's Antitrust Division, said the decision does not mean the government is backing down.

"We remain firmly committed to the case and to getting effective relief for consumers," James said, the Washington Post reported.

The department, however, indicated it will seek other penalties, such as stopping Microsoft from making certain exclusive deals with partners and forbidding the software company from forcing computer manufacturers to keep specific Microsoft icons and programs on the Windows desktop.

The Bush administration's Justice Department said it was dropping two key elements of the Clinton-era case against Microsoft for fear it would lengthen court proceedings and hurt consumers.

The department initially sought to break Microsoft into two companies--one for its Windows operating system and the other for its business and home software--as U.S. District Court Judge Thomas Penfield Jackson once ordered in the case. That order was eventually reversed by an appeals court, and a new judge was appointed to consider a new penalty.

The Justice Department also said it would not pursue allegations that Microsoft had violated federal antitrust law by integrating its Internet Explorer web browser software into its Windows operating system--a strategy known as tying or bundling--in an effort to hurt competitors.

Although both decisions were victories for Microsoft, legal experts say other government penalties could affect or delay Microsoft's new Windows XP operating system, scheduled to reach stores in October.

Microsoft reacted cautiously to the Justice Department announcement. "We remain committed to resolving the remaining issues in the case," spokesman Vivek Varma said.