Microsoft Found Guilty as Charged
- By Scott Bekker
Moving another step closer to a remedy in the antitrust case against
Microsoft Corp., U.S. District Judge Thomas Penfield Jackson today
stated that the software giant is guilty of maintaining its monopoly
through predatory and anti-competitive means.
The ruling comes just forty-eight hours after talks between Microsoft
and the Department of Justice fell apart.
In his Conclusions of Law, Judge Jackson stated that Microsoft
violated the Sherman Antitrust Act by abusing its monopoly over
the operating system market.
"Over the past several years, Microsoft has comported itself
in a way that could only be consistent with rational behavior
for a profit-maximizing firm if the firm knew that it possessed
monopoly power, and if it was motivated by a desire to preserve
the barrier to entry protecting that power," according to
In particular, the Conclusions of Law stated that Microsoft illegally
gained browser market share by tying it to Windows, and acted
to deter Netscape Navigator from being bundled with PCs.
The report also stated that Microsoft acted to prevent Sun Microsystems
Inc.'s (www.sun.com) Java from
being used in the market.
In the report, Judge Jackson expressed that Microsoft's actions
should be viewed holistically.
"Only when the separate categories of conduct are viewed,
as they should be, as a single, well-coordinated course of action
does the full extent of the violence that Microsoft has done to
the competitive process reveal itself," Jackson wrote in
The Conclusions of Law issued today follow tightly the Findings
of Fact issued by Judge Jackson last fall.
The one place it varied was in that the Conclusions of Law stated
that Microsoft did not violate antitrust laws with its marketing
agreements with PC makers.
"Today's ruling was not unexpected," said Microsoft
Chairman Bill Gates in a press conference on Microsoft's Redmond
campus. "But there are several steps ahead in this case."
Gates maintained that his company still wants to resolve the case.
Government officials have also expressed a willingness to reopen
the talks. Reports have speculated, however, that a settlement
at this point is unlikely -- particularly for the government to
agree to anything less than a breakup after the harsh Conclusions
Microsoft's senior vice president of law and corporate affairs,
Bill Neukom, indicated in the press conference that Microsoft
plans to appeal on the basis of the procedure imposed upon Microsoft,
questions of law, and findings that Microsoft believes are inadmissible
for not passing hearsay requirements.
"It will be a broad reaching appeal by Microsoft," he
Neukom also said he expects the remedies phase of the case to
take a few months. Beyond that an initial ruling may take up to
Looking forward, Gates said that Microsoft doesn't see its future
in the products it already has. Instead, the company sees its
real value emerging through future innovations, such as Next Generations
Windows Services, a platform the company plans to detail this spring.
Company president Steve Ballmer remained as positive as possible.
"Until the appeal is over, nothing is settled," he said.
Based on the finding of fact that Microsoft indeed has a monopoly
and illegally used said monopoly, a flurry of private suits are
expected to be filed immediately. - Thomas Sullivan
Scott Bekker is editor in chief of Redmond Channel Partner magazine.