Microsoft may be split up, says judge

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THE US Justice Department said yesterday that it is considering a break-up of Microsoft, the world's largest software company, after a judge found that the group had used its power to stifle innovation.

The comments are likely to fuel selling of Microsoft shares when trade restarts today, two day's after the ruling by US District Judge Thomas Penfield Jackson.

Speaking on "This Week", a US television programme, Assistant Attorney General Joel Klein said: "That [a break-up] is in the range but we're looking at a lot of remedies."

Observers said that Judge Jackson's sometimes indignant tone towards Microsoft's behaviour left little doubt he would consider tough penalties.

"All the remedy alternatives are open, including what many people said three months ago was unthinkable," said Glenn Manishin, who helped write a study of Microsoft earlier this year for a trade association that endorsed a breakup. "It's very thinkable now."

The government "has to be emboldened to ask for about the toughest penalties you can see," said Robert Litan, a former senior Justice Department official, now at the Brookings Institution.

"It is more likely than not that it will ask for a breakup of the company in some form."

Judge Jackson stopped short of saying that Microsoft violated anti-trust laws, although his factual findings suggest he is likely to reach that conclusion next year.

The judge will then decide what remedies to impose on Microsoft.

Judge Jackson, who presided over 77 days of testimony, late on Friday declared Microsoft a monopolist whose aggression stifled innovation and hurt consumers by limiting choices and keeping its software prices high.

The judge wrote some high-tech innovations "that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self interest".

The harm to consumers, he added, was "immediate and easily discernible".