The Microsoft Antitrust Case

The Microsoft Antitrust Case In 1998 the Microsoft Corporation was at the center of an investigation by the U.S. Department of Justice (DOJ) which alleged the company of violating the Sherman Act. The Sherman Act is considered the foundation of federal antitrust litigation, and is used to “combat anticompetitive practices, reduce market domination by individual corporations, and preserve unfettered competition as the rule of trade” (www.law.cornell.edu). The DOJ concentrated on 4 specific violations of the Act, (1) Microsoft engaged in “unlawful exclusive dealings and other exclusionary agreements”, (2) Microsoft engaged in “unlawful tying”, which was the act of Microsoft tying together two products …show more content…
Also, the fact that users could not opt to remove Internet Explorer from their computers left no room for consumer choice and/or preference. Judge Thomas P. Jackson presided over the court case between the DOJ and Microsoft, issuing the following remedies; (1) structural: break Microsoft into two separate companies, one for the operating system (Windows) and another for the software applications (including Internet Explorer) and (2) behavioral: Microsoft was ordered to allow consumers to remove any applications from the operating system, and was prohibited from interfering with any non-Microsoft “middleware” (Java, Netscape etc.), meaning a company could not be discriminated against for using non-Microsoft products. (Baron, p. 320). Judge Jackson also ruled that Microsoft had to ensure its software and hardware be compatible with non-Microsoft products. In terms of the appropriateness of a structural remedy, research points to a 2011 update by the DOJ regarding this type of remedy. To paraphrase, it states a behavioral remedy may be effective if a structural remedy would eliminate the organization’s efficiencies. (www.mwe.com). With the Microsoft case, the Court of Appeals decided to vacate (cancelling or rescinding court orders and judgments) the structural remedy order of breaking the company into two different entities, stating that