Verdict Will Affect Partnerships, Agreements

The U.S. Court of Appeals for the District of Columbia Circuit has found that Microsoft performed illegal acts to maintain a monopoly on operating systems for Intel-based PCs. (For a detailed summary of the decision, see “What the Appeals Court Said“.) In response, Microsoft will give OEMs more control over the Windows desktop and will make it easier for OEMs and consumers to remove the Internet Explorer (IE) Web browser from Windows XP. However, the verdict is unlikely to change the company’s practice of bundling application-like features with Windows in the near future.

The appeals court’s decision leaves the antitrust case far from a neat and tidy ending. The appeals court stayed any remedies in the case, so Microsoft is not legally compelled to take any immediate action. The district court must rehear portions of the case, and the plaintiffs are pressing the appeals court to make this happen as quickly as possible; they may also ask for some kind of injunction against Microsoft’s behavior before the October 25 launch of Windows XP. In an effort to avoid continuing to trial, Microsoft has settled with New Mexico, one of the 19 states named as plaintiffs, and has reportedly approached Department of Justice (DoJ) officials to discuss a settlement. In addition, the company has asked the court to reconsider and clarify its opinion on whether “commingling” IE code with Windows code was illegal.