WASHINGTON — Reversing a Clinton-era legal strategy, the Bush administration announced Thursday it will no longer seek the breakup of Microsoft and wants to end the historic antitrust case against the software maker as quickly as possible.
The Justice Department, however, indicated it will seek penalties first suggested by a judge earlier in the case that could affect or delay the company's soon-to-be-released Windows XP operating system.
"The department is seeking to streamline the case with the goal of securing an effective remedy as quickly as possible," a Justice Department spokesman said.
Meanwhile, an organization partly funded by Microsoft says 65 percent of Utahns in a poll want to see an end to the legal battle between the company and state and federal law enforcement officials.
The study commissioned by Americans for Technology Leadership indicated Utahns want the antitrust lawsuit to either be dropped or settled.
ATL said the survey involved 502 registered Utah voters. The organization said only 22 percent of those polled in early August believe the case should continue.
"Utah voters are sending a clear message to state and federal regulators that it's time for this case to come to an end," Jim Prendergast, ATL's executive director, said. "Clearly, the people of Utah feel strongly that the case against Microsoft should certainly not be expanded or prolonged."
However, Paul Murphy, spokesman for the Utah Attorney General's Office, questioned whether that "message" had been sent by Utahns or Microsoft.
"I'd be very skeptical of any poll that is funded by Microsoft," Murphy said. "If (Utah pollster) Dan Jones went out and conducted the poll, I think we'd probably take notice."
Thursday's Justice Department release sent Microsoft's stock down on Wall Street, where investors have been eagerly awaiting the release of the company's new operating system in hopes it would reinvigorate the stagnant technology sector. Microsoft's stock was down 62 cents to $57.12 late Thursday morning.
Microsoft, which has long resisted a breakup, reacted cautiously to the Justice Department announcement. "We remain committed to resolving the remaining issues in the case," spokesman Vivek Varma said.
The Bush Justice Department said it was dropping two key elements of the Clinton-era case against Microsoft for fear they would lengthen court proceedings and hurt consumers. The department said it "is taking these steps in an effort to obtain prompt, effective and certain relief for consumers."
The Justice Department said it would no longer seek to break Microsoft into two companies — one for its Windows operating system and the other for its other business and home software — as U.S. District Judge Thomas Penfield Jackson once ordered in the case. That order was eventually reversed by an appeals court, and a new judge was appointed to consider a new penalty.
The department also said it would not pursue allegations the company had illegally combined a previously separate product — a strategy known as tying or bundling — in an effort to hurt competitors.
Both decisions were victories for Microsoft, which has waged a costly four-year battle to dispute those allegations and has continued to build more features into its products.
But the Justice Department said it would seek to stop Microsoft from making certain exclusive deals with partners, forcing computer manufacturers to keep specific icons and programs on the Windows desktop and other requirements. Those restrictions were also imposed by Jackson but immediately rescinded when Microsoft appealed the case.
Jackson's penalties also included a prohibition on tying, which would presumably not be included in the new penalties sought by the government.
Wayne Klein, the Utah assistant attorney general working on the Microsoft case, said Thursday the states were in line with the Bush administration's announcements.
"We've been debating this ever since the (appeals court) decision," Klein said. "But the states are in agreement with the decisions announced this morning by the Department of Justice, and we were consulted on it."
Howard University law professor Andy Gavil said the restrictions could have a large impact on Windows XP, which has been completed by programmers but won't reach stores until October. Microsoft has given computer manufacturers more latitude in icon placement than in previous versions of Windows, but Microsoft still requires that certain Microsoft icons appear on users' screens.
"It's hard to square the interim remedy with Windows XP," Gavil said. "All of these little things really have to do with how XP is being prepared and marketed."
ATL said its survey indicated that 76 percent of Utahns polled believe Microsoft should be able to ship Windows XP, while 83 percent said that state attorneys general should not stop the shipment of the product.
Gavil said the Justice Department's action means the case could move more quickly and is more palatable to Bush appointees.
"Rather than fight the battle over breakup, get down to the brass tacks over how we can change their conduct now in a way that will preserve some competition in the marketplace," he said. "It is probably more philosophically agreeable to the administration."
Contributing: Brice Wallace, Jenifer Nii, The Associated Press