Two Conservative Groups Urge Feds To Call Off Microsoft Breakup

By Jim Burns | July 7, 2008 | 8:19 PM EDT

( - On Tuesday, shortly before the U.S. Supreme Court refused to hear the Microsoft antitrust case, two conservative business groups urged the federal government to back off its effort to break up Microsoft.

The Small Business Survival Committee and Citizens Against Government Waste were responding to a study done by University of Texas-Dallas professor Stan Liebowitz, who believes such a breakup would lead to huge increase in software prices and create havoc in the computer industry.

The Supreme Court, meanwhile, returned Microsoft antitrust case to a federal appeals court, saying that court should rule first, before the Supreme Court reviews the case. Microsoft faces the prospect of being split into two companies.

Liebowitz's study -- titled "An Expensive Pig in a Poke: Estimating the Cost of the District Court's Proposed Breakup" - says the government's proposed breakup of Microsoft would increase software prices anywhere from $50 billion to $125 billion over a three- year period.

In addition, he said the government's proposed remedies will reduce competition in high-end computer technology sectors; raise costs for software developers; result in fewer improvements to the Windows Operating System; and further confuse personal computer consumers.

Christopher Wysocki, president of the Small Business Survival Committee, said in a statement, said, "This study validates what we have been saying since the government witch hunt against Microsoft began, namely, that when government overrules the marketplace, consumers pay directly in the end."

Wysocki concluded, "It is time to stop the madness at the Department of Justice, and Attorney General Reno should simply let the marketplace work its wonders. The proposed remedies against Microsoft would harm consumers, and enough of the taxpayer's money has been spent on this politically motivated trial."

Citizens Against Government Waste President Thomas Schatz said, "Whether the Supreme Court decides to retain the case or send it to the Court of Appeals, both courts should take this study into account and consider the economic impact of the decision.

"With the economy, and in particular the technology sector, under pressure from high oil prices and low euro value, it is vital that Professor Liebowitz's study be considered at every level of this case."

Vice President Al Gore has made big business and special interests an issue in the presidential campaign, but he had no immediate comment on the study.

Liebowitz is a professor of Economics at the University of Texas at Dallas. He is the author of more than 25 academic articles and five books.