updated 10:40 am EDT, Fri August 31, 2007
DoJ on MS antitrust suit
The Department of Justice today told a U.S. court that its Microsoft anti-trust settlement benefits consumers and competition in the middleware market. Final judgments against the Redmond-based software giant benefit the development and distribution of middleware -- including Web browsers, media players, and instant messaging software -- resulting in more choices for consumers, the department said. In a joint filing in the U.S. District Court for the District of Columbia, the Department and the states of New York, Louisiana, Maryland, Ohio, and Wisconsin submitted a review of the final judgments entered in 2002 to resolve the antitrust case against Microsoft.
The core allegation of the lawsuit was upheld by the U.S. Court of Appeals in June of 2001, declaring that Microsoft had unlawfully maintained its monopoly in the PC-based operating systems market by excluding competing software products (middleware) that posed a threat to the Windows operating system.
"Specifically, the Court of Appeals upheld the District Court's conclusion that Microsoft engaged in unlawful exclusionary conduct by using contractual provisions to prohibit computer manufacturers from supporting competing middleware products on Microsoft's operating system, prohibiting consumers and computer manufacturers from removing access to Microsoft's middleware products in the operating system, and reaching agreements with software developers and third parties to exclude or impede competing middleware products," the Department of Justice stated.
The agreement was designed to stop Microsoft's unlawful conduct, prevent the company from engaging in the same or similar conduct in the future, and restore the potential for competition in the middleware market.
"The final judgments have been successful in protecting the development and distribution of middleware products and in preventing Microsoft from continuing the type of exclusionary behavior that led to the original lawsuit," said Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division. "The Antitrust Division has made enforcement of the final judgments an important priority and will continue to vigorously enforce the antitrust laws in computer software markets."
The department said in its filing that: "Since the entry of the Final Judgments, there have been a number of developments in the competitive landscape relating to middleware and to PC operating systems generally that suggest that the Final Judgments are accomplishing their stated goal of fostering competitive conditions among middleware products, unimpeded by anticompetitive exclusionary obstacles erected by Microsoft."
The report cites examples of the ruling's success which include increased competition with Microsoft's Internet Explorer Web browser, the popularity of Apple's iTunes as well as Adobe's Flash technology for handling multimedia content, the increasing use of Web-based services for email which formerly would have been handled by Microsoft's own local applications, and decisions by Dell as well as Lenovo to offer computers pre-loaded with Linux installed rather than Windows.
The filing also noted that final judgments were not designed to eliminate Microsoft's Windows monopoly or reduce its market share in the operating system market by any specific amount, primarily because Microsoft was never found to have acquired or increased its monopoly market share in an unlawful manner. The Department of Justice says that the judmnts were designed instead to re-invigorate competitive conditions that Microsoft had suppressed, thus allowing the market to determine the success of middleware products.
Microsoft settled six antitrust lawsuits in the fall of 2003, paying five states as well as the District of Columbia a total of about $200 million. Those settlements brought the Redmond-based company's total payout regarding related antitrust decisions in 10 states to approximately $1.55 billion, which included the $1.1 billion settlement of a California lawsuit in January of 2003.
Final judgments on the latest antitrust ruling are scheduled to expire in November of 2007, however the department deemed it necessary to extend certain provisions of the judgments relating to protocol licensing until November of 2009. Microsoft agreed to that decision, and acknowledged that the department and state antitrust enforcement agencies can at their discretion apply to the court in the fall of 2009 for an additional extension to all or part of the extended provisions for a period of up to three more years. Such an extension, if enacted, would maintain antitrust measures through November of 2012.
The next status conference hearing is scheduled to take place on Tuesday, September 11th, 2007 before Judge Kollar-Kotelly.