Microsoft Antitrust Case Essay

2059 words - 8 pages

United States vs. Microsoft Corporation

Microsoft first came under serious government scrutiny in 1990, and was sued by the US Government for violations of the Sherman Antitrust Act in early 1994. After a series of accusation and rebuttals, Microsoft entered into a consent agreement with the United States in 1995 that required it to offer a version of its Windows 95 operating system without its Internet Explorer browser. Only one manufacturer, Packard Bell licensed this browser less version, and then only for some of its laptop computers. The consent decree also contained a few other restrictions, which Bill Gates, chairman of Microsoft, termed “nothing”. As a result of this consent decree, the Government dropped its charges against Microsoft.
The consent decree also prohibited Microsoft from requiring OEMs (Original Equipment Manufacturers) to license any other product as a condition of their Windows licenses. The Government continued its investigation into Microsoft, primarily at the urging of Microsoft’s competitors who felt that Microsoft was ignoring the conditions of the consent decree.
Netscape and Sun Microsystems continued to pressure the DOJ for action. The DOJ continued its investigations and actively pursued investigations into the alleged monopolistic activities of Microsoft Corporation. During the course of the investigation, Microsoft and the DOJ (Department of Justice) continued to negotiate a new consent decree. After 18(eighteen) unsuccessful drafts, the DOJ, in conjunction with 20 (twenty) states attorneys general, filed suit against Microsoft on May 18, 1998. The complaint charged Microsoft with four counts of violating the Sherman Act, with two violations under Section 1 and two violations under Section 2 . The charges were :
· Section 1 (count a) Exclusive Dealing – Microsoft had forced computer companies that used its Windows operating system to sign agreements that they would not license, distribute or promote software products that competed with Microsoft’s own software products.
· Section 1 (count b) Unlawful Tying – Microsoft “tied” its own browser, Internet Explorer, to its Windows operating system so that customers who purchased Windows also had to get Internet Explorer, although these were tow separate products, and tying the two products together degraded the performance of the operating system.
· Section 2 (count c) Monopoly Maintenance in the OS Market – Microsoft had attempted to gain a monopoly in the Internet browser market by forcing computer companies that used its Windows operating system to agree to leave Internet Explorer as the default browser and to not preinstall or promote the browser of any other company.

· Section 2 (count d) Attempted Monopolization of the Browser Market – Microsoft had a monopoly in the market for PC operating systems and had used anticompetitive and predatory tactics to maintain its monopoly power.
The case wound its way through the legal process...

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