U.S. v Microsoft A Brief History of the Microsoft Antitrust Trial ( )

Time Line of the Trial ● 1995: Microsoft launches Windows 95 ● 1997(Sept.): MS releases Internet Explorer 4.0 to challenge market leader Netscape Navigator ● 1998: Justice Department & 20 states sue MS for anticompetive practices ● 1999(Nov. 5): Judge Thomas Penfield Jackson declares that MS is monopoly ● 2000(April 3): Judge Jackson finds MS's bundling of IE into Windows in violation of the Sherman Antitrust Act

Time Line Continued ● 2000(April 28): Justice Department & 17 states ask Judge Jackson to breakup MS into two companies ● 2000(June 7): Judge Jackson orders MS split into two companies (MS appeals the ruling) ● 2000(Sept. 26): The Supreme Court sends MS's appeal to a D.C. circuit court for hearings ● 2001(Feb.): Appeals court hears MS's case, criticizes Judge Jackson

Time Line Continued ● 2001(June 28): Appeals court throws out the breakup order ● 2001(Sept. 6): Justice Department gives up on pursuing a MS breakup ● 2001(Oct.): Justice Department and MS reach a settlement deal Source:

Issues Behind the Trial In the mid 1990s Netscape Navigator was the dominant web browser. MS, of course, wanted to control this market. They went about this by bundling their Internet Explorer browser into Windows so that everyone who used Windows would use IE. Netscape cried foul and the government stepped in suing MS for anticompetive practices and creating barriers to entry. MS was charged under the Sherman Antitrust Acts for attempting to leverage their monopoly in one market to gain a monopoly in a related market.

Summary of the Trial MS was charged under the Sherman Antitrust Acts. The case was sent to a federal court to be heard by Judge Thomas Penfield Jackson. In preliminiary hearings Judge Jackson ruled that MS was a monopoly in the desktop OS market, thereby helping the prosecution's case from the start. Judge Jackson found MS guilty and ordered the company split. One half would develop the Windows OS and the other half would develop applications such as Internet Explorer, Media Player, and Office. The idea was, of course, to end MS's practice of bundling their programs with Windows.

Conclusion of the Trial MS appealed the ruling, naturally. The appeal was sent to a federal circuit court of appeals. Shortly thereafter the story leaked that Judge Thomas Penfield Jackson had made comments outside of court critisizing MS and comparing Chairman Bill Gates to Napoleon. This, of course, led the appeals court to believe that Judge Jackson was biased in his ruling. The appeals court threw out the breakup order and eventually led the prosecution and MS to a settlement. In reality, MS got off with a slap on the wrist.

Future of the Trial MS is off the hook in the U.S., however their antitrust woes continue in Europe. The European Commission (EU) continues to prosecute MS with the same case brought in U.S. v Microsoft back in This time the focus is on Real Networks, maker of Realplayer, lawsuit against MS for bundling Windows Media Player into Windows so that customers will naturally use Windows Media Player as opposed to Realplayer. Of course, the EU case doesn't affect MS operations in the U.S. but it does affect them in their other major market: Europe. MS has yet to develop any market for their products in South America, Africa, or Asia (where piracy accounts for over 90% of the software used).

Author's Interpretation of the Trial First, MS is not a monopoly. There are viable alternatives to Windows. These include Apple and Linux. Apple and Linux both have emulators that allow them to run apps written for Windows, making it easier to switch to them. However, MS's major competition continues to be their own pirated software. It's estimated that in the U.S. pirated software accounts for around 40% of software in use; in South America and Asia that number is over 90% (copyright laws there are nonexistent or not enforced).

Author's Interpretation Continued Second, MS doesn't bundle applications (apps) with their Operating System (OS). Internet Exploder and Media Player aren't really separate applications, they're utilities that should be part of the OS. Bundling apps would be if MS forced customers to purchase Office along with Windows which would raise the price by some $300. Third, the break up order went too far. A more appropriate punishment for MS would be to order them to disclose the source code of their Dynamic Link Libraries (DLLs), the inner workings of their network protocols, and highly detailed documentation of how apps should be written to run optimally on Windows. This would greatly aid developers writing apps for Windows and those writing DLLs for Wine which allows Windows apps to run on Linux.

Solutions to the Trial The solution for the government is to leave MS alone and focus on more important legal issues such as the drug war. The solution for the user is to use a different OS if you don’t like MS’s practices. Some have brought class action lawsuits against MS, which is wrong for a number of reasons the author won’t go into here. The user could pay more for Apple or they could get Linux for free. You can switch to Linux and still do everyday PC tasks such as word processing, web browsing, and Instant Messenger (IM) just as easy as with Windows. If you want more advanced apps you’ll have to do some manual configuration. If you’ll not willing to do that then quit complaining about MS and use Windows.

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Conclusion The Microsoft Antitrust Trial was a lengthy process that threatened to end MS’s domination in the desktop OS and apps market. In the end MS escaped the break up order and came out of the ordeal with a slap on the wrist (they had to provide software to schools). Any questions?