Microsoft Found Guilty In Antitrust Trial

In the historic antitrust suit filed by the federal government, 19 states, and the District of Columbia, Microsoft was found guilty of violating the Sherman Antitrust Act on three counts out of four. Judge Thomas Penfield Jackson of the U.S. District Court in Washington, D.C., delivered a scathing judgment that accused Microsoft of “exclusionary, anticompetitive, and predatory acts.” In a victorious press conference following the ruling, Tom Miller, attorney general of Iowa and spokesman for the states, described the outcome as “a broad-based finding of liability, of lawbreaking.” Microsoft’s stock dropped 14% on the verdict. Jackson has set forward an expedited schedule to determine a remedy, with a public hearing set for late May. Microsoft intends to appeal and in the meantime is trying to forge ahead with business as usual.

Details of the Judgment

The court found Microsoft guilty of violating Section 2 of the Sherman Antitrust Act, which prohibits maintaining a monopoly by anticompetitive means. In further violation of Section 2, Microsoft was judged to have illegally leveraged its operating system (OS) monopoly to achieve a monopoly in a second market, namely the browser market. The court chose to go against an earlier Appeals Court ruling in declaring that Microsoft had also violated Section 1 of the Sherman Act through an illegal “tying arrangement” between the OS and the browser. On technical grounds, Microsoft was acquitted of “exclusive dealing,” which would have been a second violation of Section 1.