DOJ officials want to split company as part of antitrust remedy.
Published:
25 April 2000 y., Tuesday
Microsoft Corp. Monday was hit by a double whammy of negative analyst comments in response to its fiscal third quarter earnings and reports that government prosecutors may seek a breakup of the software giant. The combination of the two caused Microsoft's stock to plunge 12-3/4 to 66-3/16 in late afternoon trading, slicing $66 billion from the company's market value within hours.
The Justice Department and 19 states are leaning toward asking a court to split Microsoft into separate companies as part of their proposed remedy in the government's landmark antitrust case against the company, a prosecution source told CNNfn Monday.
If the Justice Department and the states make such a recommendation, it would be the first time since the government's antitrust case against AT&T Corp. in the early 1980's that a court has considered a forced break up of a company for monopolizing its markets. Earlier this month, U.S. District Judge Thomas Penfield Jackson concluded that Microsoft maintained its monopoly power in the market for PC operating systems by anti-competitive means and attempted to monopolize the Web browser market. The judge also found that Microsoft violated the Sherman Act by unlawfully tying its Web browser to its operating system. The federal government and the 19 states involved in the case are expected to submit to the court this week proposed remedies against Microsoft. The prosecution source told CNNfn that the proposed remedy being drafted would split Microsoft into one company containing its Windows operating system -- the focal point of the antitrust suit -- and another company containing its software applications. Those applications - which include such titles as Word, Excel and PowerPoint - make up about 40 percent of the company's sales. The Washington Post reported Monday that prosecutors may recommend breaking Microsoft into three companies, one of which would contain the software giant's Internet products, such as its web browser and the Microsoft Network.
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