United States v. Microsoft

United States v. Microsoft (87 F. Supp. 2d 30 (D.D.C. 2000)) was a court case filed against Microsoft Corporation on May 18, 1998 by the United States Department of Justice and twenty U.S. states. The plantiffs alleged that Microsoft abused monopoly power in its handling of operating system sales and web browser sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer web browser software with its Microsoft Windows operating system. Bundling them together is alleged to have been responsible for Microsoft's victory in the browser wars as every Windows user had a copy of Internet Explorer. It was further alleged that this unfairly restricted the market for competing web browsers (such as Netscape Communicator) that were slow to download over a modem or had to be purchased at a store. Underlying these disputes were questions over whether Microsoft altered or manipulated its application programming interfaces (APIs) to favor Internet Explorer over third party web browsers, Microsoft's conduct in forming restrictive licensing agreements with OEM computer manufacturers, and Microsoft's intent in its course of conduct.

Settlement

On November 2, 2001, the DOJ reached an agreement with Microsoft to settle the case. The proposed settlement required Microsoft to share its application programming interfaces with third-party companies and appoint a panel of three people who will have full access to Microsoft's systems, records, and source code for five years in order to ensure compliance. However, the DOJ did not require Microsoft to change any of its code nor prevent Microsoft from tying other software with Windows in the future. On August 5, 2002, Microsoft announced that it would make some concessions towards the proposed final settlement ahead of the judge's verdict. On November 1, 2002, Judge Kollar-Kotelly released a judgment accepting most of the proposed DOJ settlement. Nine States and the District of Columbia (which had been pursuing the case together with the DOJ) did not agree with the settlement, arguing that it did not go far enough to curb Microsoft's anti-competitive business practices. On June 30, 2004, the U.S. appeals court unanimously approved the settlement with Justice Department, rejecting objections from Massachusetts that the sanctions are inadequate.

Related Topics:
November 2 - 2001 - Application programming interfaces - August 5 - 2002 - November 1 - District of Columbia

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The dissenting States regarded the settlement as merely a slap on the wrist. Some people in the computer industry agreed with dissenting States, especially those who advocated open source and alternatives to Microsoft. Many believed that free market competition can only be restored by government intervention to break up the Microsoft monopoly. Others believe that government intervention is antithetical to free market principles, maintaining that Microsoft was not, and is not, a coercive monopoly. Industry pundit Robert X. Cringely believes a breakup is not possible, and that "now the only way Microsoft can die is by suicide." http://www.pbs.org/cringely/pulpit/pulpit20040408.html Andrew Chin, an antitrust law professor at the University of North Carolina who assisted Judge Jackson in drafting the findings of fact, wrote that the settlement gave Microsoft "a special antitrust immunity to license Windows and other 'platform software' under contractual terms that destroy freedom of competition." http://www.newsobserver.com/opinion/story/1686331p-7930186c.html

Related Topics:
Open source - Free market - Competition - Coercive monopoly - Robert X. Cringely - University of North Carolina

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