Politics 80X: Politics of the Internet

US v. MicroSoft

What Are the Issues?

The legal contentions are set out in the filings of the parties with the Court. Through the legal niceties the main position of the parties can be discerned. The following is from Week 5 of the P80X Table of Links:

4
Added
1998
7 Nov
US DoJ filing, the charge against MicroSoft in US v. MicroSoft.
5
Added
1998
7 Nov
MicroSoft filing in response to the US DoJ filing in US v. MicroSoft.

Relevant sections of the US Code are excerpted in P80X Note 5.6:

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Added
1998
7 Nov
Selections from the US Code, Title 15, Chapter 1. §§ 1, 2, 13 and 14, bearing on monopoly and actions in restraint of trade.

The New York Times, in a 5 May 1988 editorial, characterized the issue between the Department of Justice and MicroSoft in the following way:

The question facing the Justice Department is how such broad principles of equity are implemented. Microsoft is on firm ground when it warns that the Government should not get into the business of imposing elaborate rules on the writing of software. But Assistant Attorney General Joel Klein is right to guide Justice's antitrust division toward an engaged role to promote competition and protect the interests of consumers. With nearly 40 percent of American households due to be linked to the Internet by 2001, the Justice Department's action in the next few weeks could shape the American economy in much the way it did with the breakup of Standard Oil in 1911.

Just what is the issue? The Department of Justice has a number of objectives. One was to maintain competition in web browsers. The Times [15 May 1998] succinctly explained the issue:

The Government wants to leave the door open for competition in the browser maket, where Microsoft's main rival is the Netscape Communications Corporation.

Microsoft insists that its browser, the Internet Explorer, is not a separate product, as Washington contends, but an inseparable feature of the Windows operationg system--especially in Windows 98, its next-generation product. Microsoft thus requires personal computer makers to load Explorer as a condition of licensing Windows.

On 18 May 1998 the United States and 20 states filed suit against Microsoft, charging use of its monopoly position in personal computer operating systems to win control of the Internet. Bill Gates responded that "This is a step backward for America, for consumers and for the prsonal computer industry that is leading our nation's economy into the 21st century." [The New York Times, 19 May 1998. See the timeline, in the same issue, showing the Justice Departments successive encounters with Microsoft.]

In a 14 September 1998 review of the ongoing case in The New York Times, Joel Brinkley said the case comes down to two opposing claims. He quotes John Warden, a lawyer for Microsoft, as saying "All companies compete; that's how the market works." But that is very different from the view of David Bois, a Justic Department lawyer, that Microsoft "bribed people to take their products, used predatory pricing and other anti-competitive tactics."