Legal Update: No Breakup Sought; EC Turns Up Heat

Paving the way for a settlement in the U.S. vs. Microsoft antitrust case, the Department of Justice (DoJ) has announced it will not seek a breakup penalty, will not pursue the claim that Microsoft illegally tied its Internet Explorer (IE) Web browser to Windows, and will not seek an injunction against Windows XP. Instead, the DoJ will focus on interim remedies already proposed by the D.C. district court, such as forcing Microsoft to offer standard Windows licensing terms to all OEMs. At the same time, the European Commission (EC) expanded its separate antitrust investigation against Microsoft to include Windows Media Player and “abusive licensing practices” with Windows 2000.

DoJ Focuses on Conduct Remedies

The DoJ’s decision eliminates two major issues in the case: the breakup remedy and the tying claim. Both were part of the original verdict handed down by the district court, which was then overturned by the U.S. Court of Appeals for the D.C. Circuit and sent for retrial to a new district court judge, Colleen Kollar-Kotelly. (For a complete summary of the appeals court’s decision, see “What the Appeals Court Said” on page 32 of the Aug. 2001 Update.) The DoJ also will not seek an injunction preventing the shipment of Windows XP, although a settlement or the eventual outcome of the case might affect the new OS after it ships.