Report: U.S. Officials Mull Splitting Up Microsoft

NEW YORK (Reuters) - U.S. officials are considering four proposals for resolving the Microsoft Corp (Nasdaq:MSFT - news). antitrust case and two of them would involve splitting up the company, The New York Times said on Wednesday.

It said the aim will be to break the company's monopoly in personal-computer operating systems, or limit its ability to wield monopoly power.

U.S. Justice Department officials and state attorneys general have not decided how that should be done, it said.

Federal District Judge Thomas Penfield Jackson said in a landmark decision on Friday that Microsoft wielded monopoly power in personal computer operating systems, and consumers and competitors had suffered as a result.

The Times noted Jackson will have to approve any settlement or remedy.

"We are now in a position to get a rather dramatic remedy," Eliot Spitzer, the attorney general of New York, which is the lead plaintiff of the 19 states in the case, told the Times.

Connecticut's attorney general, Richard Blumenthal, told the Times: "When we started this case, we had nowhere near as specific and clear an idea how serious and far-reaching the evidence of this abuse of their monopoly would be."

The state attorneys general have seemed to take a tougher line on Microsoft than the Justice Department, the Times said, but now they are unified in the position that the problem is the Windows monopoly.

Officials say four remedies are under discussion, according to the Times.

One would be to force Microsoft to publish the secret, proprietary source code that makes up the Windows operating system.

Another would be to force the company to auction the Windows source code so that two or three other companies could sell competing systems, the Times said..

A third would split it into several parts, each holding all the software code and intellectual property from Microsoft products, but in competition.

The final alternative is breaking it up into three companies, one controlling the operating system, one its applications programmes like Word and Excel, and the third with the Internet and related businesses, the Times said.