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 (DOJ) and twenty U.S. states. Joel I. Klein was the lead prosecutor. The plaintiffs 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 (IE) 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 Navigator or Opera) 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. // The United States Reports, the official reporter of the Supreme Court of the United States Case citation is the system used in common law countries such as the United States, England and Wales, Ireland, Canada, New Zealand, Hong Kong, Australia and India to uniquely identify the location of past court... The United States District Court for the District of Columbia is the United States District Court that hears cases originating in the District of Columbia under Federal law. ... Microsoft Corporation (NASDAQ: MSFT), (founded 1975), headquartered in Redmond, Washington, USA, is the worlds largest software company (with over 50,000 employees in various countries, as of May 2004). ... May 18 is the 138th day of the year in the Gregorian Calendar (139th in leap years). ... 1998 (MCMXCVIII) was a common year starting on Thursday of the Gregorian calendar, and was designated the International Year of the Ocean. ... DOJ headquarters in Washington, D.C. Justice Department redirects here. ... Joel I. Klein is Chancellor of the New York City public school system, the largest system in the United States with over 1. ... In economics, a monopoly (from the Latin word monopolium - Greek language monos, one + polein, to sell) is defined as a persistent market situation where there is only one provider of a product or service. ... An operating system (OS) is a computer program that manages the hardware and software resources of a computer. ... An example of a web browser (Mozilla Firefox), displaying the English Wikipedia main page. ... Windows Internet Explorer (previously known as Microsoft Internet Explorer, abbreviated IE or MSIE) is series of proprietary graphical web browser developed by Microsoft and included as part of the Microsoft Windows line of operating systems starting in 1995. ... Microsoft Windows is the name of several families of proprietary software operating systems by Microsoft. ... A rough estimation of the usage share of major web browsers by layout engines over time. ... Netscape Navigator, also known as Netscape, was a proprietary web browser that was popular during the 1990s. ... Opera is an Internet suite which handles common internet-related tasks, including visiting web sites, sending and receiving e-mail messages, managing contacts, and online chat. ... A application programming interface (API) is the interface that a computer system, library or application provides in order to allow requests for services to be made of it by other computer programs, and/or to allow data to be exchanged between them. ... Original equipment manufacturer, or OEM, is a term that refers to a situation in which one company purchases a manufactured product from another company and resells the product as its own, usually as a part of a larger product the original company is selling. ...

Microsoft stated that the merging of Microsoft Windows and Internet Explorer was the result of innovation and competition, and that the two were now the same product and were inextricably linked together and that consumers were now getting all the benefits of IE for free. Those who opposed Microsoft's position countered that the browser was still a distinct and separate product which didn't need to be tied to the operating system, since a separate version of Internet Explorer was available for Mac OS. They also asserted that IE was not really free, because its development and marketing costs may have kept the price of Windows higher than it might otherwise have been. The case was tried before U.S. District Court Judge Thomas Penfield Jackson. The DOJ was initially represented by David Boies. Competition is the act of striving against another force for the purpose of achieving dominance or attaining a reward or goal, or out of a biological imperative such as survival. ... This article or section does not cite its references or sources. ... Thomas Penfield Jackson (born January 10, 1937) was a United States District Court Judge for the District of Columbia. ... David Boies (born March 11, 1941) is a lawyer and a managing partner of Boies, Schiller & Flexner (BSF). ...

History

Government interest in Microsoft's affairs had begun in 1991 with an inquiry by the Federal Trade Commission over whether Microsoft was abusing its monopoly on the PC operating system market. The commissioners deadlocked with a 2-2 vote in 1993 and closed the investigation, but the Department of Justice opened its own investigation on August 21 of that year, resulting in a settlement on July 15, 1994 in which Microsoft consented not to tie other Microsoft products to the sale of Windows but remained free to integrate additional features into the operating system. In the years that followed, Microsoft insisted that Internet Explorer (which first appeared in the Plus! Pack sold separately from Windows 95) was not a product but a feature which it was allowed to add to Windows, although the DOJ did not agree with this definition. FTC headquarters, Washington, D.C. The Federal Trade Commission (or FTC) is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. ... August 21 is the 233rd day of the year (234th in leap years) in the Gregorian Calendar. ... July 15 is the 196th day (197th in leap years) of the year in the Gregorian Calendar, with 169 days remaining. ... 1994 (MCMXCIV) was a common year starting on Saturday of the Gregorian calendar, and was designated as the International Year of the Family and the International Year of the Sport and the Olympic Ideal by United Nations. ... Microsoft Plus! is an operating system enhancement package provided by Microsoft. ...

Trial

Bill Gates giving his deposition at Microsoft on August 27, 1998

The trial started in May 1998 with the U.S. Justice Department and the Attorneys General of twenty U.S. states suing Microsoft for illegally thwarting competition in order to protect and extend its software monopoly. Later, in October the US Justice Department also sued Microsoft for violating a 1994 consent decree by forcing computer makers to include its Internet browser as a part of the installation of Windows software. During the antitrust case it was revealed that Microsoft had threatened PC manufacturers with revoking their license to distribute Windows if they removed the Internet Explorer icon from the initial desktop, something that Netscape had requested of its licensees. Wikipedia does not yet have an article with this exact name. ... Wikipedia does not yet have an article with this exact name. ... August 27 is the 239th day of the year in the Gregorian Calendar (240th in leap years), with 126 days remaining. ... 1998 (MCMXCVIII) was a common year starting on Thursday of the Gregorian calendar, and was designated the International Year of the Ocean. ...

Microsoft Chairman Bill Gates was called "evasive and nonresponsive" by a source present at a session in which Gates was questioned on his deposition. [1] He argued over the definitions of words such as "compete", "jihad", "concerned", "ask", and "we". [2] BusinessWeek reported, "Early rounds of his deposition show him offering obfuscatory answers and saying 'I don't recall' so many times that even the presiding judge had to chuckle. Worse, many of the technology chief's denials and pleas of ignorance have been directly refuted by prosecutors with snippets of E-mail Gates both sent and received." [3] Intel Vice-President Steven McGeady, called as a witness, quoted Paul Maritz, a senior Microsoft vice president as having stated an intention to "extinguish" and "smother" rival Netscape Communications Corporation and to "cut off Netscape's air supply" by giving away a clone of Netscape's flagship product for free. The Microsoft executive denied the allegations. [4] For other persons named Bill Gates, see Bill Gates (disambiguation). ... Intel Corporation (NASDAQ: INTC, SEHK: 4335), founded in 1968 as Integrated Electronics Corporation, is an American multinational corporation that is best known for designing and manufacturing microprocessors and specialized integrated circuits. ... Steven McGeady is a former Intel executive best known as a witness in the Microsoft Antitrust Trial. ... Paul Maritz was a senior executive at Microsoft from 1986 to 2000. ... Netscape Communications Corporation was the publisher of the Netscape Navigator web browser as well as many other internet and intranet client and server software products. ...

A number of videotapes were submitted as evidence by Microsoft during the trial, including one that demonstrated that removing Internet Explorer from Microsoft Windows caused slowdowns and malfunctions in Windows. In the videotaped demonstration of what Microsoft vice president James Allchin's stated to be a seamless segment filmed on one PC, the plaintiff noticed that some icons mysteriously disappear and reappear on the PC's desktop, suggesting that the effects might have been falsified. [5] Allchin admitted that the blame for the tape problems lay with some of his staff "They ended up filming it -- grabbing the wrong screen shot," he said of the incident. Later, Allchin re-ran the demonstration and provided a new videotape, but in so doing Microsoft dropped the claim that Windows is slowed down when Internet Explorer is removed. Mark Murray, a Microsoft spokesperson, berated the government attorneys for "nitpicking on issues like video production." [6] Microsoft submitted a second inaccurate videotape into evidence later the same month as the first. The issue in question was how easy or hard it was for America Online users to download and install Netscape Navigator onto a Windows PC. Microsoft's videotape showed the process as being quick and easy, resulting in the Netscape icon appearing on the user's desktop. The government produced its own videotape of the same process, revealing that Microsoft's videotape had edited out a long and complex part of the procedure and that the Netscape icon was not placed on the desktop, requiring a user to search for it. Brad Chase, a Microsoft vice president, verified the government's tape and conceded that Microsoft's own tape was inaccurate. [7] James Allchin James Edward Allchin (born in Grand Rapids, Michigan in 1951) is co-President of the Platform Products and Services Group at Microsoft, responsible for Microsofts operating systems, streaming media products and Internet services. ...

When the judge ordered Microsoft to offer a version of Windows which did not include Internet Explorer, Microsoft responded that the company would offer manufacturers a choice: one version of Windows that was obsolete, or another that did not work properly. The judge asked, "It seemed absolutely clear to you that I entered an order that required that you distribute a product that would not work?" David D. Cole, a Microsoft vice president, replied, "In plain English, yes. We followed that order. It wasn't my place to consider the consequences of that." [8] Princeton University professor Edward Felten presented a modified version of Windows from which he claimed the Internet Explorer function had been removed. On cross-examination, he was guided through a sequence of steps that produced a fully functional Internet Explorer window. David D. Cole is an American Law Professor at Georgetown University. ... Princeton University is a coeducational private university located in Princeton, New Jersey, in the United States of America. ... Edward William Felten (born March 25, 1963) is a professor of computer science and public affairs at Princeton University. ...

Microsoft vigorously defended itself in the public arena, claiming that its attempts to innovate were under attack by rival companies jealous at its success, and that government litigation was merely their pawn. A full-page ad run in The Washington Post and The New York Times on June 2, 1999 by The Independent Institute (which is funded by Microsoft) delivered "An Open Letter to President Clinton From 240 Economists On Antitrust Protectionism." It said, in part, "Consumers did not ask for these antitrust actions - rival business firms did. Consumers of high technology have enjoyed falling prices, expanding outputs, and a breathtaking array of new products and innovations. ... Increasingly, however, some firms have sought to handicap their rivals' races by turning to government for protection. ... Many of these cases are based on speculation about some vaguely specified consumer harm in some unspecified future, and many of the proposed interventions will weaken successful U.S. firms and impede their competitiveness abroad." [9] The Washington Post is the largest newspaper in Washington, D.C., the capital of the United States. ... The New York Times is a newspaper published in New York City by Arthur Ochs Sulzberger Jr. ... June 2 is the 153rd day of the year in the Gregorian calendar (154th in leap years), with 212 days remaining. ... 1999 (MCMXCIX) was a common year starting on Friday, and was designated the International Year of Older Persons by the United Nations. ...

Judge Jackson issued his findings of fact on November 5, 1999, which stated that Microsoft's dominance of the personal computer operating systems market constituted a monopoly, and that Microsoft had taken actions to crush threats to the monopoly, including Apple, Java, Netscape, Lotus Notes, Real Networks, Linux, and others. Then on April 3, 2000, he issued a two-part ruling: his conclusions of law were that Microsoft had committed monopolization, attempted monopolization, and tying in violation of Sections 1 and 2 of the Sherman Act, and his remedy was that Microsoft must be broken into two separate units, one to produce the operating system, and one to produce other software components. November 5 is the 309th day of the year (310th in leap years) in the Gregorian Calendar, with 56 days remaining. ... 1999 (MCMXCIX) was a common year starting on Friday, and was designated the International Year of Older Persons by the United Nations. ... April 3 is the 93rd day of the year (94th in leap years) in the Gregorian calendar, with 272 days remaining. ... This article is about the year 2000. ... The Sherman Antitrust Act was the first government action to limit trusts (A combination of firms or corporations who agree not to lower prices below a certain rate for the purpose of reducing competition and controlling prices throughout a business or an industry). ...

The trial was also notable for the use by both the prosecution and the defense of professors of MIT to serve as expert witnesses to bolster their cases. Richard L. Schmalensee, a noted economist and the dean of the MIT Sloan School of Management, testified as an expert witness in favor of Microsoft. Frank Fisher, another MIT economist and who ironically was Schmalensee's former doctoral thesis adviser, testified in favor of the Department of Justice. Mapúa Institute of Technology (MIT, MapúaTech or simply Mapúa) is a private, non-sectarian, Filipino tertiary institute located in Intramuros, Manila. ... Richard L. Schmalensee is the John C. Head III Dean, and Professor of Management and Economics, at the MIT Sloan School of Management. ... The MIT Sloan School of Management is one of the five schools of the Massachusetts Institute of Technology, located in Cambridge, Massachusetts, USA. It is one of the worlds leading business schools, conducting research and teaching in finance, entrepreneurship, marketing, strategic management, economics, organizational behavior, operations management, supply chain... DOJ headquarters in Washington, D.C. Justice Department redirects here. ...

Appeal

On September 26, 2000, after Judge Jackson issued his findings of fact, in order to save time the plaintiffs attempted to send Microsoft's appeal directly to the Supreme Court. However, the Supreme Court declined to hear the appeal and sent the case to a federal appeals court. The D.C. Circuit Court of Appeals unanimously overturned Judge Jackson's rulings against Microsoft on browser tying and attempted monopolization on grounds that he gave off-the-record (but nevertheless disclosed) interviews to the news media during the case, and that Judge Jackson having opinions about the defendant was improper. Judge Jackson's response to this was that Microsoft's conduct itself was the cause of any "perceived bias"; Microsoft executives had "proved, time and time again, to be inaccurate, misleading, evasive, and transparently false. ... Microsoft is a company with an institutional disdain for both the truth and for rules of law that lesser entities must respect. It is also a company whose senior management is not averse to offering specious testimony to support spurious defenses to claims of its wrongdoing." However, the appeals court did affirm in part Judge Jackson's ruling on monopolization. The D.C. Circuit remanded the case for consideration of a proper remedy for "drastically altered scope of liability" that the court had upheld, under Judge Colleen Kollar-Kotelly. The DOJ, now under the administration of U.S. President George W. Bush, announced on September 6, 2001 that it was no longer seeking to break up Microsoft and would instead seek a lesser antitrust penalty. September 26 is the 269th day of the year (270th in leap years) in the Gregorian calendar. ... This article is about the year 2000. ... News media satellite up-link trucks and photojournalists gathered outside the Prudential Financial headquarters in Newark, New Jersey in August, 2004 following the announcement of evidence of a terrorist threat to it and to buildings in New York City. ... Colleen Kollar-Kotelly (born 1943 in New York) is a judge for the United States District Court for the District of Columbia and the presiding judge of the Foreign Intelligence Surveillance Court (FISC). ... The presidential seal was first used by President Hayes in 1880 and last modified in 1959 by adding the 50th star for Hawaii. ... George Walker Bush (born July 6, 1946) is the 43rd and current President of the United States, inaugurated on January 20, 2001. ... September 6 is the 249th day of the year (250th in leap years). ... 2001 (MMI) was a common year starting on Monday of the Gregorian calendar. ...

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 (California, Connecticut, Iowa, Florida, Kansas, Minnesota, Utah, Virginia and Massachusetts) 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. November 2 is the 306th day of the year (307th in leap years) in the Gregorian Calendar, with 59 days remaining. ... 2001 (MMI) was a common year starting on Monday of the Gregorian calendar. ... A application programming interface (API) is the interface that a computer system, library or application provides in order to allow requests for services to be made of it by other computer programs, and/or to allow data to be exchanged between them. ... August 5 is the 217th day of the year in the Gregorian Calendar (218th in leap years), with 148 days remaining. ... For album titles with the same name, see 2002 (album). ... November 1 is the 305th day of the year (306th in leap years) in the Gregorian Calendar, with 60 days remaining. ... For album titles with the same name, see 2002 (album). ... Nickname: DC, The District Motto: Justitia Omnibus (Justice for All) Location of Washington, D.C., in relation to the states Maryland and Virginia Coordinates: Federal District District of Columbia  - Mayor Adrian M. Fenty (D)  - City Council Chairperson: Vincent C. Gray (D) Ward 1: Jim Graham (D) Ward 2: Jack Evans... June 30 is the 181st day of the year (182nd in leap years) in the Gregorian Calendar, with 184 days remaining. ... 2004 (MMIV) was a leap year starting on Thursday of the Gregorian calendar. ...

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." [10] Andrew Chin, an antitrust law professor at the University of North Carolina at Chapel Hill 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." [11] Open source refers to projects that are open to the public and which draw on other projects that are freely available to the general public. ... A free market is an idealized market, where all economic decisions and actions by individuals regarding transfer of money, goods, and services are voluntary, and are therefore devoid of coercion and theft (some definitions of coercion are inclusive of theft). Colloquially and loosely, a free market economy is an economy... Competition is the act of striving against another force for the purpose of achieving dominance or attaining a reward or goal, or out of a biological imperative such as survival. ... In economics and business ethics, a coercive monopoly is any monopoly maintained by coercion. ... Robert X. Cringely is the pen name of both technology journalist Mark Stephens and a string of writers for a column in InfoWorld, the weekly computer trade newspaper published by IDG. Stephens as Cringely Stephens was the third author to contribute to Infoworld under the Cringely pseudonym, the first two... The University of North Carolina at Chapel Hill is a public, coeducational, research university located in Chapel Hill, North Carolina, United States. ...

Microsoft's obligations under the settlement, as originally drafted, expire on November 12, 2007. [12] However, Microsoft later "agreed to consent to a two-year extension of part of the Final Judgments" dealing with communications protocol licensing, and that if the plaintiffs later wished to extend those aspects of the settlement even as far as 2012, it would not object. The plaintiffs made clear that the extension was intended to serve only to give the relevant part of the settlement "the opportunity to succeed for the period of time it was intended to cover", rather than being due to any "pattern of willful and systematic violations". The court has yet to approve the change in terms as of May 2006.[13] November 12 is the 316th day of the year (317th in leap years) in the Gregorian Calendar, with 49 days remaining. ... 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the Anno Domini (common) era. ... In the field of telecommunications, a communications protocol is the set of standard rules for data representation, signalling, authentication and error detection required to send information over a communications channel. ... 2006 is a common year starting on Sunday of the Gregorian calendar. ...

Criticisms of the case

Some critics of the antitrust proceedings against Microsoft assert that they were an unjustified assault on a business that held a large market share merely by outcompeting its rivals. Some hold that the case against Microsoft was the result of collusion between government and Microsoft's competitors in an attempt to gain an unfair advantage by thwarting the free market through government coercion. The late Nobel economist Milton Friedman believed that the antitrust case against Microsoft set a dangerous precedent that foreshadowed increasing government regulation of what was formerly an industry that was relatively free of "government intrusion" and that future technological progress in the industry will be impeded as a result. Moreover, Friedman said that antitrust laws do more harm than good and should not exist. Strict free market advocates believe that the only type of monopolies that should be dismantled are coercive monopolies and reject the claim that Microsoft falls in this category. A free market is an idealized market, where all economic decisions and actions by individuals regarding transfer of money, goods, and services are voluntary, and are therefore devoid of coercion and theft (some definitions of coercion are inclusive of theft). Colloquially and loosely, a free market economy is an economy... Milton Friedman (July 31, 1912 – November 16, 2006) was an American economist and public intellectual who made major contributions to the fields of macroeconomics, microeconomics, economic history and statistics while advocating laissez-faire capitalism. ... In economics and business ethics, a coercive monopoly is any monopoly maintained by coercion. ...

Jean-Louis Gassée, CEO of Be Inc., which at the time made a competing operating system which eventually folded in the face of Microsoft's dominance, provided a series of criticisms against the antitrust suit. These criticisms were levelled at the overemphasis on the "packaging problem". Microsoft wasn't really making any money off the "sales" of Internet Explorer, and its reason for incorporating it into the operating system was because the consumer expected to have a browser packaged with the operating system. Indeed, BeOS came packaged with its web browser, NetPositive. Instead, he argued, Microsoft's true anticompetitive clout was in the rebates it offered to OEMs preventing other operating systems from getting a foothold in the market. [14] Jean-Louis Gassée (born March 1944 in Paris, France) was an executive at Apple Computer from 1981 to 1990. ... Be, Incorporated was the company that developed the BeOS operating system and BeBox computer. ... BeOS is an operating system for personal computers which began development by Be Inc. ...

The lobby group Association for Competitive Technology (ACT) was founded in response to the case, though some claim that the organization is mainly a front for Microsoft. The Association for Competitive Technology (ACT) is an American technology lobby group that is sometimes claimed to be a front organization for Microsoft, though it has other large, independent members such as eBay. ... A front organization (or organisation), also known as a front group (if it is structured to look like a voluntary association); a front company, a shell corporation or simply a front (if it is structured to look like a company), is any entity set up by and controlled by another...

External links

• Final Judgment in U.S. v. Microsoft (injunction including final settlement terms approved by the court) (note that the copy posted on the district court's web site is actually an earlier version that the court declined to approve).
• The United States DOJ's website on U.S. v. Microsoft
• Antitrust for Fun and Profit by Llewellyn H. Rockwell, Jr. of the Ludwig von Mises Institute, August 1998
• Wired news timeline of the Microsoft antitrust case
• ZDnet story on 4th anniversary of Microsoft antitrust case
• ZDnet story on proposed concessions
• Antitrust & the Internet: Microsoft case archive
• "A Case of Insecure Browsing" by Andrew Chin. Raleigh News & Observer, September 30, 2004
• March/April 1999 - The Business Community's Suicidal Impulse by Milton Friedman (includes criticism of the antitrust case against Microsoft)