Microsoft Corp is drafting a counterproposal to the US government's breakup plan that involves limits on its business practices, such as giving computer makers more flexibility to alter Windows software and offering versions of Windows without access to the company's Internet browser, people familiar with the plan said on Saturday.
The company's proposal is meant to show US District Judge Thomas Penfield Jackson that there is a remedy directly addressing the court's verdict - that Microsoft broke federal antitrust law - without going to the "radical" extent of breaking the company in two, sources close to the company said.
The Justice Department and 17 states last month urged the judge to break Microsoft into two companies: one that would sell personal computer operating systems, the brains that run personal computers; and another company that would focus on selling software applications, Internet services and other Microsoft products.
Microsoft's response to the government breakup plan is due on Wednesday. Its lawyers are set to seek more time to respond to the proposal, permission to question government experts and access to government records used to justify the breakup plan.
The remedy plan, which still is being drafted by Microsoft attorneys, appears to fall somewhat short of what the company offered the government in out-of-court settlement talks before Judge Jackson's verdict.
Under the proposal, Microsoft would be required to provide open, timely and complete access to the parts of the Windows operating system code used by independent software companies to design their software applications to run on Windows. This is meant to address the judge's findings that Microsoft used access to the applications programming interfaces in a discriminatory fashion.
To address the judge's finding that Microsoft broke the law by tying the Internet browser to the Windows operating system, Microsoft intends to propose offering a version of Windows that "hides" access to the browser in the operating system. Microsoft contends that the two products now are fully integrated and cannot be separated, but it could configure the software to "hide" access to the browser, which is software used to access the World Wide Web.
Offering its own conduct-limiting remedy, something that was requested last month by the judge, presents Microsoft with a tricky task because the company continues to argue that no laws were broken, and it intends to challenge vigorously the judge's ruling on appeal. It puts Microsoft in the delicate position of defending its innocence while meeting the judge's request that the company find a remedy to a verdict it plans to dispute legally.
