The Facts of the Microsoft/DoJ Case
November 7, 1999
At the turn of the millenium, one of the biggest antitrust cases of the century is drawing to a close. Well, sort of. U.S. District Judge Thomas Penfield Jackson has finally delivered his Findings of Fact in the Microsoft vs. Department of Justice antitrust case, with a potentially devastating effect on Microsoft. In nearly all respects, Judge Jackson found that Microsoft has, for years, acted in its own best interests against those of the public. The case, though, is far from over. It will be several months before an actual verdict and penalties are rendered. Unless Microsoft enters into a deal with the Justice Department, the case could go on for years as Microsoft enters appeals. Nonetheless, there are implications to be drawn that should interest anyone in the computer industry, which, since all our lives are tied into computers now, means virtually everyone.
The Findings of Fact
Note: Quotations from the text of the Findings of Fact are presented in quotation marks and italicized.
Just what did Judge Jackson say in his 150-page Findings? Following is a quick review of the major points:
Relevant Market: Jackson found that "no firm that does not currently market Intel-compatible PC operating systems could start doing so in a way that would. . .present a significant percentage of consumers with a viable alternative to existing Intel-compatible PC operating systems". Thus, Microsoft truly is a monopoly. The Findings go on to state in detail the reasons that Microsoft must be considered a monopoly in a variety of computing areas, such as desktop computers and operating systems.
Power in the Relevant Market: The Findings state that three issues result from Microsoft's monopoly:
"First, Microsoft's share of the market for Intel-compatible PC operating systems is extremely large and stable."
"Second, Microsoft's dominant market share is protected by a high barrier to entry."
"Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows."
Middleware: Software that provides platforms for other software to run, such as browsers and Java, was perceived as a threat by Microsoft, because they provide portability between platforms and operating systems. Specific examples used are Netscape's browser, Sun's implementation of Java (especially within the Netscape browser), and Lotus Notes.
Response to Browser Threat: Initially, in 1995, Microsoft attempted to convince Netscape to accept a deal in which its browser, Navigator, would not serve as an application program interface (API) in exchange for support from Microsoft in its browser development. Failing this, Microsoft changed tactics: withholding crucial information. The Remote Network Access API, a critical requirement for writing code on the upcoming Windows 95 platform, was withheld for three months, until August 1995. As a result, Netscape was not able to partake of the 1995 holiday sales season. Withholding of a scripting tool, given freely to ISPs , prevented Netscape from doing business with many ISPs for a time.
