News

Decade of Antitrust Scrutiny Ends for Microsoft

• By Kurt Mackie
• May 13, 2011

A final legal judgment against Microsoft that was rendered in 2002 over antitrust concerns expired on Thursday, the U.S. Department of Justice (DoJ) announced this week.

The case dates back to the late 1990s, when Microsoft was accused of using its control of the Windows operating system markets to give Internet Explorer an unfair advantage in the browser market. Specifically, Netscape Communications Corp. complained that its Navigator Web browser was being excluded from fair U.S. market competition.

Microsoft as Monopolist
The original case was filed on May 18, 1998 and settled on Nov. 12, 2002 with a federal court's final judgment. Microsoft was named by the court as a "monopolist" because of its control over the OS market with Windows.

The DoJ's announcement this week implied that an extension of the final judgment's terms, which concerned the oversight of Microsoft's documentation, has ended too.

"Certain provisions in the Microsoft final judgment expired in November 2007," the DoJ explains at the end of its announcement. "Other provisions relating to Microsoft's obligation to make certain interoperability information available to third parties have twice been extended with Microsoft's consent. As these issues have now been resolved, it is appropriate for the final judgment to expire."

The DoJ appears to be referring to extensions that Microsoft agreed to concerning its documentation process. Microsoft voluntarily agreed to ensure, with DoJ oversight, that its published software documentation and APIs will enable interoperability with other software products. That effort was headed by former President of the Server and Tools Business Bob Muglia, who stepped down in January. Muglia was replaced by Satya Nadella in February. Microsoft initiated a broad program in 2008 to open up its APIs and documentation, which may have been instigated, in part, due to antitrust litigation, both in the United States and abroad.

Microsoft has faced parallel anti-competition legal charges in the European Union, specifically over Windows Server interoperability issues, as well as the distribution of its Windows Media Player and IE via Windows. In the latter case, the European Commission held Microsoft to stricter standards than in the United States. Microsoft was required to give users a choice of competing browsers by issuing a browser ballot to Windows users. An idea that Microsoft would be compelled to sell Windows in Europe without IE was scrapped, however.

In the U.S. courts, Microsoft had argued that IE could not be separated from Windows as a distinct program. Microsoft's CEO Steve Ballmer has described IE as "a feature" of Windows in recent years. To this day, Microsoft's software lifecycle ties its browser with Windows, even though both pieces of software are routinely released separately and at different times.

Internet Explorer Wins
Even though Netscape "won" the legal battle in the 1998 case, it ultimately lost the big browser war. In the mid-1990s, Netscape Navigator held more than 90 percent of the browser market, but by the end of 2006, that market share had plummeted to less than 1 percent, according to one estimate. Had U.S. legal authorities required Microsoft to initiate a browser ballot, the story for Netscape might have been different.

IE currently dominates the browser market with 55 percent use, according to Net Applications' data, with the next runner-up being Firefox at 22 percent. The nonprofit Mozilla Foundation built Firefox as an open source project, mostly based on code remaining from the ashes of Netscape's earlier efforts.

Microsoft had little to say about the expiration of this final judgment, except to indicate that its practices have changed.

"Our experience has changed us and shaped how we view our responsibility to the industry," a Microsoft spokesperson stated via e-mail. "We are pleased to bring this matter to successful resolution, and we are excited to keep delivering great products and services for our partners and customers."

For its part, the DoJ viewed the case as a victory for consumers and competition, stating that "the judgment protected the development and distribution of middleware -- including web browsers, media players and instant messaging software -- thereby increasing choices available to consumers."

Some issues may still live on concerning Microsoft's past competition practices. An appeals court this month cleared the way for Novell (newly acquired by Attachmate Corp.) to sue Microsoft over antitrust claims associated with WordPerfect, which Novell owned in 1994. Novell's complaints are associated with the Microsoft's use of its OS market control to exclude applications, as well as allegations that exclusionary agreements were in place with original equipment manufacturers, hurting WordPerfect distribution and helping Microsoft Word.

Related:

• Why We'll Never See Anything Like the Microsoft Antitrust Case Again