The Bush administration, reversing the Clinton White House legal strategy against Microsoft, told the software manufacturer today longer seeks to have the company broken up.
The US government also said it will not pursue the bundling issues in its protracted antitrust suit against the software giant.
The news follows a judge's order for the two sides to produce a joint status report by September 14th.
The government told Microsoft that it does not intend to pursue a breakup and will drop the bundling issue to "facilitate consultations" in the joint report, the department said.
In trading on the Nasdaq Stock Market after the announcement, Microsoft shares were down $1.05 a share, or 1.8 per cent, at $56.69.
The US government's about-face wasn't totally unexpected. At the time of his confirmation hearings to be attorney general, Mr John Ashcroft hedged when asked repeatedly by senators about the government's commitment to pursuing the lawsuit against Microsoft.
Mr Ashcroft for the most part said that was among a host of issues he would need to review.
The attorney general’s department said that since an appellate court agreed that Microsoft illegally maintained a monopoly over the market for operating systems, the government "believes it has established a basis for relief that would end Microsoft's unlawful conduct, prevent its recurrence and open the operating-systems market to competition."
Pursuing the tying claim would only prolongue the proceedings, the department said.
AP
