Attorney General John D. Ashcroft and Deborah Majoras, an assistant attorney general in the antitrust division, discuss the settlement.
(Susan Biddle -- The Washington Post)
Take an online tour of Windows XP, the newest version of Microsoft's operating system. New features are highlighted, along with a discussion of why certain features of XP are being criticized by Microsoft's competitors. (Flash 5 Required)
In particular, the states asked that if Microsoft sells Windows bundled with other applications, it must also be forced to sell versions of its operating system that do not include the programs. The states' theory is that forcing Microsoft to remove the applications, rather than giving people the option to hide them, enables all makers of applications to compete fairly for space on the Windows desktop.
Such unbundling, Microsoft said, would be technically impossible to achieve, and it would grievously damage the company.
The states also sought to require Microsoft to make public all the code for its Internet Explorer, in effect allowing it to become an open-source software product that the software engineering community could build upon. Microsoft said such a move would constitute theft of its intellectual property.
But Kollar-Kotelly would have none of the state's arguments.
Under the federal settlement with Microsoft, the company will have to disclose more of its computer code to enable rival applications to operate with Windows; it will have to give computer makers and users the ability to mask Windows applications, such as the Internet browser and digital media player, and not impede the installation of rival programs; and the company is prohibited from retaliating against computer makers or other vendors who use competing software.
Microsoft's battles with the government date to 1994, when the Justice Department first filed suit against the company for illegal business practices relating to its Windows monopoly. Like last year, the two sides settled the case, agreeing to some restrictions on the company.
In 1997, the government filed charges claiming that the company had violated the terms of the agreement, a case the government eventually lost.
In 1998, under then-antitrust chief Joel Klein, the government filed a massive new suit, in conjunction with a similar case brought by 20 states. The suits were consolidated for the purpose of a trial, which was held by District Court Judge Thomas Penfield Jackson in Washington beginning in October 1988.
The government charged Microsoft with a raft of anti-competitive acts that helped it gain and protect its hammerlock on the personal computer software market. Microsoft was accused of quashing competitive threats posed by Netscape Communications Corp.'s Internet browser and Sun Microsystems' Java technologies; of withholding crucial computer code that allows rival software programs to operate with Windows; of having exclusive and illegal licensing provisions; and of strong-arming computer makers into using Microsoft applications in favor of those made by rivals.
At the end of a nearly three-month trial, Jackson ruled that Microsoft had violated the Sherman Antitrust Act in three key areas, including illegally protecting its operating system and illegally attempting to monopolize the browser market. Jackson also adopted the government's proposed remedies, which included breaking up the company.
Microsoft immediately appealed, and a little more than a year later the federal appeals court in Washington agreed with some parts of Microsoft's challenge.
Of the legal challenges Microsoft still faces, the most serious is likely to be in Europe. Regulators at the European Commission have issued preliminary findings that the company illegally restricted competition in the growing market for network servers and in the market for digital media players.
According to lawyers familiar with the European investigation, its competition directorate is preparing a final ruling with stiffer sanctions than those sought by the Justice Department, although the cases differ in several areas. Officials at the U.S. antitrust division, these lawyers said, have been urging the EU to mirror the settlement they struck with Microsoft.
The decision also defines the legacy of Charles A. James, the outgoing head of the antitrust division, who had staked his reputation on the agreement and his interpretation of the case.
Staff writers Jonathan Finer, Carrie Johnson and David A. Vise contributed to this report.
Attorney General John D. Ashcroft and Deborah Majoras, an assistant attorney general in the antitrust division, discuss the settlement.
(Susan Biddle -- The Washington Post)
