"The worst thing that could come of this is I could fall down the steps of the FTC building, hit my head and kill myself," quipped Microsoft Chairman William H. Gates in 1992, as the Federal Trade Commission launched an investigation of his company. But nobody joked on the third day of April, 2000, as Judge Thomas Penfield Jackson
delivered his decision on what had morphed into the biggest software antitrust case in history:
The United States of America vs. Microsoft.
"The court concludes that Microsoft maintained its monopoly power by anticompetitive means and attempted to monopolize the Web browser market," Jackson declared.
Ten years ago, on September 26, 2000, that trial took a crucial turn towards the settlement that would allow Microsoft to retain its vast control over the personal computer operating system market. Let's revisit the essentials of that case, and follow the aftermath—a legacy of endless negotiation and struggle with the entity that, to this day, is the OS on
91.32 percent of the world's PCs.
Drastic reduction
To Judge Jackson, Microsoft's behavior was a clear and present violation of the Sherman Antitrust Act. Early on, he warned, Microsoft came to see "middleware"—specifically the Netscape Navigator Web browser and Sun's Java technology—as a "Trojan horse," that could enable competing operating systems to prevail over the Intel-empowered PC market.
"When Netscape refused to abandon its efforts to develop Navigator into a substantial platform for applications development," Jackson continued, "Microsoft focused its efforts on minimizing the extent to which developers would avail themselves of interfaces exposed by that nascent platform." Microsoft did this primarily via by tethering its own Internet Explorer to every Windows PC system and simultaneously making it more difficult to install or pre-install Navigator.
This "increased the likelihood that preinstallation of Navigator onto Windows would cause user confusion and system degradation," leading to more support costs and lower sales for computer manufacturers, the court concluded. Thus these companies felt "compelled by Microsoft's actions to reduce drastically their distribution and promotion of Navigator."
Three weeks later, the Department of Justice and the Attorneys General of 17 states asked that same judge to cut Microsoft in half. Company one would make and sell Microsoft's operating system. Company two would produce and distribute applications. This is what Jackson
ordered on June 7, 2000.
Here was a 1911 Standard Oil and 1984 AT&T break-up moment, noted
The New York Times. "If the recommendation were enacted by the court and upheld on appeal, it would be one of the few times in the 110-year history of the Sherman Antitrust Act that the government had succeeded in breaking up a major multinational corporation."
But it never happened. Instead, on September 26, 2000, the Supreme Court
refused to hear the case, which was then routed to the United States Court of Appeals for the District of Columbia. Regular Ars readers are quite familiar with this venue, which
recently rebuked the Federal Communications Commission's attempt to sanction Comcast for P2P throttling.
There, Jackson's conclusions met a similar fate. "I am not in the camp that says just because a district court lists something under 'findings of fact,' it's gospel," declared the court's Harry Edwards during oral arguments. "It has to be a fact, in fact."
