More than six months after he declared the Microsoft Corporation an abusive monopolist, US District Judge Thomas Penfield Jackson ordered the company split into two parts: one that would sell operating systems and another that would sell applications.
In an order that basically followed a DOJ remedy proposal word for word, Jackson gave Microsoft four months to submit a divestiture plan once the judgment is in place. In a memorandum accompanying the judgment, Jackson called Microsoft "untrustworthy" and defended his decision to deny Microsoft extra time to fight the breakup plan - a move that Microsoft claims caught it off guard.
"Microsoft's profession of surprise is not credible," Jackson wrote in the filing. "From the inception of this case, Microsoft knew - from well-established Supreme Court precedents dating from the beginning of the last century - that a mandated divestiture was a possibility, if not a probability, in the event of an adverse result at trial."
Microsoft chairman Bill Gates vowed to appeal and said he would pursue a motion to set aside Jackson's ruling while he does so. "Today is the start of a new phase of this case," Gates said during a news conference soon after Jackson's ruling was released.
Under federal antitrust law, the DOJ also has the option of expediting the case by leapfrogging the District Court and asking the US Supreme Court to hear it directly.
Jackson also placed a series of restrictions on Microsoft's conduct for at least three years. These restrictions would prevent Microsoft from restricting computer makers who seek to modify computer startup screens, force the company to disclose technology that would let competitors make products that work smoothly with its operating systems, and forbid Microsoft from taking actions that knowingly interfere with the performance of competitors' products.
Wednesday's ruling, in effect, winds up the trial in Jackson's courtroom, a phase that has lasted more than two years. The DOJ and 20 state attorneys general sued Microsoft in May 1998, accusing it of violating federal antitrust law. During the trial, which began that October, both sides called dozens of witnesses from the computer industry to testify on their behalf.