The Basics of the Ruling

FRAMINGHAM (04/10/2000) - What did Judge Jackson rule?

He ruled that Microsoft violated Sections 1 and 2 of the Sherman Antitrust Act through a series of exclusionary, anti-competitive and predatory acts. Jackson found that Microsoft illegally integrated Internet Explorer and the Windows operating system, a violation of Section 1. Jackson's "conclusions of law" went on to say Microsoft pressured OEMs, service providers and developers in a campaign to crush the growth of Netscape Navigator and the Java programming language. Jackson also said Microsoft tried to monopolize the Web browser market. Both, he said, were violations of Section 2 of the Sherman Act. He also found the company violated antitrust laws in the 19 states that were part of the suit.

Was there anything favorable to Microsoft?

Yes. Jackson said Microsoft's marketing deals with other vendors were not illegal exclusive deals as the government charged. He also found that Microsoft did not entirely cut off Netscape from distribution channels for its browser, a fact that opens a legal crack in Jackson's ruling that Microsoft engaged in anticompetitive behavior.

What is the next stage in the trial?

The penalty phase, which begins later this month and concludes May 24. The judge said the government must file its proposal for penalties by April 28 and Microsoft must file its response and its own proposals by May 10. The government will then respond to Microsoft's proposals by May 17.

What are the possible penalties?

The judge could impose a conduct remedy or a structural remedy. Given the pace Jackson has assigned to the penalty phase, a breakup of Microsoft, the structural option, may be less likely. A conduct remedy would focus on forcing Microsoft into uniform licensing practices and the opening up of source code and APIs.

What does this all mean for enterprise customers?

Little at this stage. The case could drag on for years. Users planning on rolling out Windows 2000, Exchange 2000 or any other BackOffice servers should keep an eye on the case, but in all likelihood they can continue their deployment plans with confidence.

Will Microsoft appeal?

Yes. But it will have to wait until after the penalty phase because the case is not final until then. Jackson said last week he will seek to expedite the appeal to the Supreme Court.

So is Microsoft off the hook until the case is settled?

Not necessarily. The government could push for preliminary restrictions during the appeals process.

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