Microsoft expects to beat break-up

After two years of legal wrangling, Federal District Judge Thomas Penfield Jackson earlier this month ordered Microsoft broken into two companies to protect consumers and the computer industry from future misuse of its monopoly power.

One company will market the Windows operating system technology, and the other will oversee Microsoft's applications business, including its Internet services. The Windows company could not develop or market the Internet Explorer (IE) browser.

Also, the two companies could not enter into any joint ventures, or license technology at better terms than they give other vendors. Microsoft reacted to the ruling with confidence that the decision will be overturned.

By immediately appealing, Microsoft can avoid having to release source code to competitors and follow other policies the executives find distasteful.

"Today's ruling represents an unwarranted and unjust intrusion into the software marketplace," Gates says.

"It really flies in the face of the development of the kind of products that have benefited customers."

Microsoft contends that it is procompetitive and that it bundled IE with Windows to benefit consumers.

"It was not to exclude Netscape or any other competitor from distributing or enhancing their product," Gates notes.

Microsoft says it used the success of its operating system to allow it to offer new technologies to consumers at low costs and thereby drive the PC industry as a whole.

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