The U.S. Department of Justice (DOJ) and 19 states have responded to Microsoft's proposed conclusions of law in the Microsoft antitrust case; as expected, the two sides don't exactly see eye to eye. In its proposed conclusions, Microsoft asserted that it broke no laws, even if the damaging findings of fact, issued in November by Judge Jackson, were true. However, the government says that Microsoft's filing "improperly evades the substantive importance of the finding of monopoly power."

Essentially, the government filing refutes each point made by Microsoft. The company says, for example, that its biggest competitors are not Intel-based PC operating systems, but rather Apple's Mac OS, UNIX, and a coming generation of information appliances. However, the DOJ quotes the court, which found that none of these solutions are "meaningful substitutes" for Intel PCs.

The DOJ also notes that Microsoft's dominance with Windows meets all of the legal requirements for a monopoly. By maintaining its monopoly for well over a decade, Windows meets the "requirement of durability." And because Microsoft controls the price of Windows, offering its partners better deals while raising prices for PC makers that compete in other markets, it is acting in violation of the Sherman Antitrust Act. Additionally, Microsoft used its OS monopoly to illegally gain marketshare in the Web browser market and shut out competitors.

"Microsoft quotes several findings to support the assertion that there are certain benefits to the combining of Internet Explorer and Windows," the filing reads. "But this court's findings plainly say the opposite: There are no benefits to combining a browser with Windows 98 that cannot be achieved through separate distribution of two products."

Microsoft will reply to the DOJ filing on February 1st. Then, on February 22, the two sides will meet before the judge for final oral arguments. At that point, Judge Jackson will determine which, if any, laws were broken by the software giant. He will then decide on a remedy, which may very well lead to the breakup of Microsoft into two or more smaller companies. However, lawyers for Microsoft and the government have been meeting with a mediator since early December, attempting to hammer out a settlement