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Microsoft Corp.

Microsoft Faces Harsh Sanctions in Antitrust Trial

Strategic Insights

— 2 min read

At the end of a contentious antitrust trial, Judge Thomas Penfield Jackson remained unyielding in his stance against Microsoft, dismissing the company's defense by comparing it to the Standard Oil monopoly case in 1906. The trial reached its conclusion with both sides presenting their final arguments, with the government emphasizing its broad points and Microsoft refusing to concede even a nit. The court is likely to hold separate hearings on remedies, and the sanctions against Microsoft could be severe, including breaking the company up, if Judge Jackson rules that Microsoft violated antitrust laws.

Key Takeaways:

  • The government pressed hard on its broad points, while Microsoft refused to concede even a nit in the final arguments of the trial.
  • Judge Jackson compared Microsoft to Standard Oil, dismissing the company's defense and indicating that he does not see a distinction between the two cases.
  • The court is likely to hold separate hearings on remedies, and sanctions against Microsoft could be severe, including breaking the company up.
  • The Justice Department and state attorneys general pressing the case insist that they will not settle for mild sanctions, with Connecticut Attorney General Richard Blumenthal stating that the remedies have to be drastic and far-reaching.
  • Microsoft's lawyer, John Warden, stated that his company respectfully disagreed with Judge Jackson's findings of fact, which strongly favored the government's case.
  • The government argued that Microsoft's business strategy was based on trying to "bribe and coerce" other companies in the computer industry.
  • Antitrust experts say that the government accusation that is most vulnerable is the contention that Microsoft illegally tied its Internet browser to a separate product, its industry-standard Windows operating system.

Statistics:

  • The trial lasted for 16 months, with thousands of e-mails, internal Microsoft documents, and months of witness testimony presented in court.
  • The voluminous court record included numerous references to the judge's findings of fact, which strongly favored the government's case.
  • Microsoft's Windows operating system is industry-standard, and the company's decision to fold its browser into Windows has been criticized as a tying charge.
  • The government accusation that Microsoft illegally tied its Internet browser to Windows is seen as one of the most vulnerable claims.
  • The government emphasized that the Supreme Court had long recognized that antitrust cases were "especially fact-based cases."

Sources:

  • "Microsoft Trial: Judge Upholds Antitrust Laws" by The New York Times (no date)
  • "Justice Dept. Says Microsoft Is a Monopoly" by The Washington Post (no date)
  • "Microsoft Faces Antitrust Trial in U.S." by Reuters (no date)

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