Microsoft yesterday claimed that a court break-up of the company is "too great a risk" for the US economy.
In papers filed with the Court of Appeals, Microsoft said the plan to split it into two separate companies - one to run the operating-systems business and the other to take over applications and other business lines - would fail.
The operating-systems company would have "powerful incentives" to add new functionality and features to the operating system, but would "behave in precisely the same way Microsoft behaves today because such behaviour makes perfect business sense".
A Justice Department spokeswoman said the government had no comment on the latest brief.
Final brief Microsoft is appealing against Judge Thomas Penfield Jackson's ruling last year that the company violated antitrust law, as well as his order to break up the company. Monday's filing was the last scheduled brief before oral arguments on February 26 and 27.
Microsoft was also harshly critical of Jackson's recently published comments about the case and said they "demonstrate an animus toward Microsoft so strong that it inevitably infected his rulings". Microsoft cited numerous references in Ken Auletta's new book, World War 3.0: Microsoft and Its Enemies, based on interviews with Jackson. In one instance Jackson compared company executives to gang members convicted of murder.
Pro-consumer Microsoft, in this brief, defended its actions as pro-consumer. It said the company, unlike a monopoly, "must continue to improve Windows and price it attractively to give existing customers an incentive to purchase a new computer or otherwise obtain a new version of the operating system".
Microsoft warned that the antitrust attack on its company could have consequences similar to those in the United Shoe Machinery antitrust case of 1953. That company had a shoemaking-equipment monopoly and was broken up. The company subsequently went into rapid decline, said Microsoft. "That same fate should not befall the American software-industry," the company wrote.
The government's argument is that breaking Microsoft up will create marketplace conditions favourable to the company's competitors. The government said the threats once posed by Netscape Navigator and Java were stymied by Microsoft's abuses of its monopoly power in operating systems.