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    Microsoft Breakup Questioned

    BY Paul Davidson
    06/06/2000
    by Paul Davidson on 6/6/00.

    The attorney general of North Carolina, one of the states suing Microsoft for antitrust violations, voiced doubts about the government's proposal to break up the company in an interview published Sunday.

    Meanwhile, prosecutors in court papers Monday blasted most of Microsoft's suggested changes to the breakup proposal, saying they would "frustrate and undermine" the plan. A federal judge is expected to accept the plan within days, after ruling in April that Microsoft used its Windows software monopoly to stifle competition.

    In an interview with The Charlotte Observer, Attorney General Mike Easley said, "I'm not convinced that a massive breakup is necessary."

    Deputy Attorney General Alan Hirsch said the excerpt omitted the fact that Easley was referring to a rejected proposal to divide the firm into clones, not the proposed split along product lines. That assertion is not reflected in the transcript, says Charlotte Observer reporter Mark Johnson. Easley did tell Johnson a product-line breakup "is probably the safest way for the court to go."

    Hirsch says Easley remains committed to the breakup, which is supported by 16 other states: "Is it the perfect answer? Of course not."

    Eric Gustafson of Citizens for a Sound Economy, a political advocacy group, suggests Easley, North Carolina's Democratic nominee for governor, was motivated by politics: "He senses public support for a breakup is not there." Hirsch denies that.

    Lawyer Rich Gray of San Jose, Calif., says the remark should hearten Microsoft, which may use political levers to try to negotiate a settlement even while it appeals the ruling.