DOJ Pushes Case Against MS

"The president-elect will not rush to litigate the way some folks in Washington enjoy litigating," Fleischer said. The next head of the Justice Department -- ex-Sen. John Ashcroft has been nominated for the job -- will have the option not to appeal a loss if the DC Court of Appeals sides with Microsoft.

During the campaign, Bush has made statements critical of the Clinton administration’s dogged pursuit of Microsoft, saying that he prefers "innovation over regulation."

Also on Friday, the Justice Department and some state governments urged the appeals court to uphold findings that Microsoft broke the law and should be split in two to prevent future violations.

In a filing with the U.S. Court of Appeals, the government said the Microsoft matter was "a classic case of monopolization" in which market dominance was used to sustain or extend that power.

"The district court acted properly in imposing the structural and conduct remedy for Microsoft's wide-ranging course of illegal actions," said part of the 150-page brief.

Last June, District Judge Thomas Penfield Jackson found that Microsoft holds monopoly power in the market for personal computer operating systems with its Windows product, and illegally used that power to crush competitors, including Web-browser rival Netscape.

On June 7, Jackson ordered that the company be broken up to prevent future antitrust violations and set other remedies, all of which he suspended pending appeal.

Free-market groups rallied on Friday to slam the government’s filing.

"It is tragic that the DOJ and 19 states continue to spend taxpayer funds on such a baseless case," said Erick Gustafson, an analyst at Citizens for a Sound Economy, a group headed by a former George Bush Sr. White House counsel.

"So far the DOJ has spent nearly $50 million, while Microsoft's value dropped more than 50 percent," Gustafson said. "Continued prosecution of the company can only lead to even more disastrous consequences. The world of software has changed since 1998 and only government lawyers hold fast to antiquated antitrust regulatory initiatives."

Microsoft told the appeals court in November that the trial court proceeding was "infected with error" and described the breakup order as "radical relief."

But the government said the breakup and various conduct remedies were designed to end unlawful conduct and prevent its recurrence.

"The structural relief wisely relies on ordinary market incentives, rather than long-term judicial oversight," the filing said.