Everybody leads with the Justice Department’s announcement yesterday that in its ongoing antitrust case against Microsoft, it would no longer seek the breakup of the company. The new stance was agreed to by the other plaintiffs in the case–17 states and the District of Columbia. This is also the top story in the Wall Street Journal’s front-page business news box.
The Washington Post says the DOJ’s move “fundamentally alters the landscape” of the case just a week before the new trial judge takes it up in earnest. The Los Angeles Times says that since the breakup goal had threatened to alter the power-structure of the technology industry, abandoning it means that the “government now is essentially accepting the industry’s status quo.” The papers note that the government also dropped its claim that Microsoft–already found to have illegally coerced computer makers to preserve its monopoly–also violated antitrust laws by tying various competitive products to its operating system software. The papers say the main reason for trimming the case in these two ways is a desire, in the words of one widely quoted DOJ official, to resolve it in “our lifetimes,” based on the realization that the recent appeals court ruling on the case set the bar for prevailing on breakup and on tying so high that it would take protracted legal maneuvering to get over it. Instead, emphasis in the trial and any possible settlement talks now shift to so-called conduct remedies–court-ordered constraints on how a still unitary Microsoft could henceforth do business.
The WP has a DOJ higher-up saying that dropping the tying claim does not mean the issue of what Microsoft now includes in its latest operating system, XP, is out of bounds for the crafting of conduct remedies, but USA Today flatly says taking the original tying claim off the table weakens the government’s case for imposing XP limits.
The New York Times and Los Angeles Times take the most note of the move’s political angle, with both papers seeing in it a strong suggestion that the Bush administration will be far less aggressive than its predecessor in regulating technology. The WSJ reports that Rep. John Conyers is so concerned about inappropriate contact between the White House and the DOJ regarding Microsoft that he’s demanded records of all communications between the two. The NYT says the no-breakup decision was made by the new head of the DOJ’s antitrust division, Charles James, and is joined by the Journal in reporting that neither the White House nor the attorney general played a role.
The NYT and LAT front Mexican President Vicente Fox’s address yesterday to a joint session of Congress, in which he called for granting residency rights to millions of Mexican immigrants currently in the U.S. illegally. The LAT describes the speech as part of Fox’s “relentless lobbying campaign” for loosening U.S. immigration rules and emphasizes that its main effect was that afterward President Bush said for the first time publicly he’s willing to consider granting permanent U.S. residency to some of those Mexicans.
The WP and LAT front the latest bad economic numbers out of Japan, which show its gross domestic product shrinking at an annual rate of more than 3 percent. And the papers point out that this is more bad news for the global economy since both the U.S. and Europe are also flagging, although not nearly so badly.
The NYT reports inside that a secret computer-conducted war game conducted recently by U.S. senior military commanders showed that even with the current levels of people and weapons, the U.S. military could beat one adversary while halting a second adversary’s offensive, which is the new somewhat diminished goal that Secretary of Defense Donald Rumsfeld has put in place of the decades-old one of triumphing completely over two enemies. The Times says the result has calmed the Pentagon’s internal debate over the viability of Rumsfeld’s proposal to cut forces in order to help finance new weapons, including those for missile defense.
“Hey Jeb, can you spare Katherine for a few weeks?”. The WP reports inside, as the NYT did yesterday, that a candidate for the presidency of Nicaragua with a good chance to win is the former Sandanista leader of that country, Daniel Ortega. The story says the Bush administration is not thrilled at the prospect.
And that’s not counting Larry King. Question: For the fall sweeps in November, how many networks will be running new shows in which a medium chats with dead celebrities? Answer, according to the WP TV section: Two.