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- WASHINGTON - A U.S. District
Court
judge has dealt Microsoft Corp. a major setback in one the biggest
American antitrust cases of the century, ruling the software giant has
monopoly power in personal computer operating systems.
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- "Microsoft has
demonstrated that it will use its
prodigious market power and immense
profits to harm any firm that insists
on pursuing initiatives that
could intensify competition against one of
Microsoft's core
products," U.S. District Judge Thomas Penfield Jackson
wrote.
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- The
ruling is part of the first phase of the antitrust
judgment. Jackson
cited the company's large and stable market share, the
high barriers to
market entry, and the lack of a commercially viable alternative
to the
Windows operating system as three facts demonstrating Microsoft's
monopoly position.
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- However, the decision doesn't necessarily mean that Microsoft
has lost the case.
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- The ruling is part of the first phase of the antitrust
judgment. Both Microsoft and the American government will now present
further arguments and Jackson will rule later this year on whether there
are any penalties or remedies.
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- If Jackson rules that Microsoft is violating antitrust
laws, he could order that the software giant be broken up into smaller
companies or choose from a variety of lesser punishments.
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- For example, he could
require Microsoft to allow rivals
to sell and improve its dominant
Windows operating system.
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- The U.S. Justice Department is calling the findings a
"tremendous" victory for U.S. consumers.
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- Microsoft says it disagrees
with many of the judge's
findings and it says it will vigorously
contest the issues in court.
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- Company chairman Bill Gates says the ruling is part of
a long process and that the legal system will ultimately uphold
Microsoft's
position.
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- The case against Microsoft began in May 1998 when the
U.S. Justice Department and 19 states charged that Microsoft had violated
antitrust laws. They alleged the company tried to illegally protect its
dominance in operating systems and unfairly competed in the Internet
browser
market.
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- Since the trial began last October, the government has
tried to portray Microsoft -- including Gates, its founder and chairman
-- as ruthless in its efforts to protect the Windows operating
system.
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- The government says that Microsoft used its market power
--
Windows is used in nine out of 10 of the world's personal computers
--
to drive rivals out of business and prevent competitors from
emerging.
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- Microsoft argued that the company is not a monopoly and
that it
does face growing competition from rival operating systems such
as
Linux.
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