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Judge says break it up. Don't hold your breath

June 7, 2000
Web posted at: 6:45 PM EDT (2245 GMT)

By Frank Pellegrini

(TIME.com) -- Maybe Judge Thomas Penfield Jackson was thinking of a NASDAQ rupture Wednesday when he waited until 4:30 to do his part for the antitrust history books. But this one shouldn't have surprised anybody. Just like the government wanted him to, Jackson ordered up a two-way, 10-year split of Microsoft (one company for apps, one for the OS, and Bill Gates can only work at one of them) and a laundry list of "conduct remedies" for the meantime. Basically, the plan is that the Redmond boys check with their lawyers before going to the bathroom. It's the biggest antitrust decision since the 1984 AT&T splintering (which was by consent decree, not court order) and it's sure to have the rest of the high-tech industry alternately leaping for joy and wondering whether down the road, the government exterminator will be worse than the rat. But mainly, it's round one.

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Next, the appeals. "This was the most favorable court the government's going to see in this case," says TIME legal correspondent Adam Cohen. "Both the appeals court and the Supreme Court are going to be more sympathetic to Microsoft, and they're going to look at the idea of a breakup as very radical and very extreme." And Jackson, may have already lobbed a fat pitch in his decision to give Microsoft only four months to design a breakup plan. "Microsoft will likely take that point straight to appeals, and there's a good chance they'd win," says TIME Silicon Valley correspondent Chris Taylor. "That could set the tone for the rest of this."

So settle in for a long wait, and watch the real punishment continue: the drib-and-drab sapping of a company that's been sweating buckets for two years under the hot lights of both Washington and Wall Street, and which now has to gear up for years more of the same. "Just because things are going to get harder for the government doesn't mean they get any easier for Microsoft," says Cohen. "This process itself is inflicting significant damage." Bill Gates was the prime beneficiary of the legal paralysis that hobbled IBM in the '80s -- he knows all too well that in the tech business, winning or losing the case is almost beside the point. Microsoft may yet dodge the hatchet, eventually, but its days of wielding the sharpest claws in the tech jungle are gone, never to return.

Copyright © 2000 Time Inc.