Microsoft Dealt Major Blow As
Judge Rules It A Monopoly
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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.
"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.
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.
However, the decision doesn't necessarily mean that Microsoft has lost the case.
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.
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.
For example, he could require Microsoft to allow rivals to sell and improve its dominant Windows operating system.
The U.S. Justice Department is calling the findings a "tremendous" victory for U.S. consumers.
Microsoft says it disagrees with many of the judge's findings and it says it will vigorously contest the issues in court.
Company chairman Bill Gates says the ruling is part of a long process and that the legal system will ultimately uphold Microsoft's position.
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.
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.
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.
Microsoft argued that the company is not a monopoly and that it does face growing competition from rival operating systems such as Linux.