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Microsoft Maintained Monopoly Power by Anticompetitive Practices
Description District court held that Microsoft violated the Sherman Act by anticompetitive practices that limited the ability of would-be competitors to develop products that would be compatible with the dominant Microsoft operating system. Bundling Microsoft's browser with its operating system was found to be an illegal tying arrangement.
Topic Antitrust
Key Words Monopolization; Tying Arrangement
C A S E   S U M M A R Y
Facts The Department of Justice and 19 states sued Microsoft for violating the Sherman Act by "an unlawful campaign in defense of its monopoly position in the market for operating systems [OS] designed to run on Intel-compatible personal computers ("PCs"). Specifically, the plaintiffs contend that Microsoft violated 2 of the Sherman Act by engaging in a series of exclusionary, anticompetitive, and predatory acts to maintain its monopoly power. They also assert that Microsoft attempted, albeit unsuccessfully to date, to monopolize the Web browser market, likewise in violation of 2. Finally, they contend that certain steps taken by Microsoft as part of its campaign to protect its monopoly power, namely tying its browser to its operating system and entering into exclusive dealing arrangements, violated 1 of the Act."
Decision The district court held that Microsoft: 1) maintained its monopoly power in OS market by antitcompetitive means; 2) attempted to monopolize the web browser market; and 3) bundled its OS and web browser in an illegal tying arrangement. It maintained its monopoly by preventing middleware technologies (competing web browsers and Java programming language) from fostering development of cross-platform and network-centric applications that would run on a variety of OS's, not just Microsoft's. Microsoft's agreements with Internet service providers, software developers, and PC manufacturers to promote Microsoft's web browser did not constitute unlawful exclusive dealing arrangements.
Citation U.S. v. Microsoft Corp., 87 F.Supp.2d 30 (D. D.C., 2000)

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