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On June 7, 2000 Microsoft was found GUILTY of illegally maintaining its monopoly power by anticompetitive means and attempting to monopolize the Web browser market by unlawfully tying its Web browser to its operating system.

Unfortunately they got off with a slap on the wrist, and the world seems to have forgotten about it.

The full Findings of Fact and judgment can be found here: http://www.gpoaccess.gov/usvms/index.html

Important excerpts from the Findings of Fact


34. Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible PC operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows.

It's official. Microsoft has a monopoly on the desktop OS market for Intel-compatible PCs. From what I have seen, this point has sometimes been misunderstood. MS does not have a monopoly on Web browser applications, or office suites, the monopoly is just on the desktop OS. Also, having a monopoly does not mean 100% dominance - just enough power to control the dominance you have. There are a large number of Linux and Mac users, but try walking in to any corporate office and talk about switching from Windows to any other OS and see how fast you get kicked out. The full FoF has an excellent and lengthy description of exactly why Microsoft is legally a monopoly.


151. Many consumers desire to separate their choice of a Web browser from their choice of an operating system. Some consumers, particularly corporate consumers, demand browsers and operating systems separately because they prefer to standardize on the same browser across different operating systems. For such consumers, standardizing on the browser of their choice results in increased productivity and lower training and support costs, and permits the establishment of consistent security and privacy policies governing Web access.
152. Moreover, many consumers who need an operating system, including a substantial percentage of corporate consumers, do not want a browser at all. For example, if a consumer has no desire to browse the Web, he may not want a browser taking up memory on his hard disk and slowing his system's performance. Also, for businesses desiring to inhibit employees' access to the Internet while minimizing system support costs, the most efficient solution is often using PC systems without browsers.

153. Because of the separate demand for browsers and operating systems, firms have found it efficient to supply the products separately. A number of operating system vendors offer consumers the choice of licensing their operating systems without a browser. Others bundle a browser with their operating system products but allow OEMs, value-added resellers, and consumers either to not install it or, if the browser has been pre-installed, to uninstall it. While Microsoft no longer affords this flexibility (it is the only operating system vendor that does not), it has always marketed and distributed Internet Explorer separately from Windows in several channels. These include retail sales, service kits for ISVs, free downloads over the Internet, and bundling with other products produced both by Microsoft and by third-party ISVs. In order to compete with Navigator for browser share, as well as to satisfy corporate consumers who want their diverse PC platforms to present a common browser interface to employees, Microsoft has also created stand-alone versions of Internet Explorer that run on operating systems other than 32-bit Windows, including the Mac OS and Windows 3.x.

154. In conclusion, the preferences of consumers and the responsive behavior of software firms demonstrate that Web browsers and operating systems are separate products.

Just what I have been telling people for years. Sad thing is it takes a judge to prove it to some of these people. And some others STILL don't believe it!

Bill Gates behind bars


187. As Felten's program demonstrated, it is feasible for Microsoft to supply a version of Windows 98 that does not provide the ability to browse the Web, to which users could add a browser of their choice. Microsoft could then readily offer "integrated" Internet Explorer Web browsing functionality as well, either as an option that could be selected by the end user or the OEM during the Windows 98 setup procedure, or as a "service pack upgrade."


172. Microsoft's refusal to respect the user's choice of default browser fulfilled Brad Chase's 1995 promise to make the use of any browser other than Internet Explorer on Windows "a jolting experience." By increasing the likelihood that using Navigator on Windows 98 would have unpleasant consequences for users, Microsoft further diminished the inclination of OEMs to pre-install Navigator onto Windows. The decision to override the user's selection of non-Microsoft software as the default browser also directly disinclined Windows 98 consumers to use Navigator as their default browser, and it harmed those Windows 98 consumers who nevertheless used Navigator. In particular, Microsoft exposed those using Navigator on Windows 98 to security and privacy risks that are specific to Internet Explorer and to ActiveX controls..

173. Microsoft's actions have inflicted collateral harm on consumers who have no interest in using a Web browser at all. If these consumers want the non-browsing features available only in Windows 98, they must content themselves with an operating system that runs more slowly than if Microsoft had not interspersed browsing-specific routines throughout various files containing routines relied upon by the operating system. More generally, Microsoft has forced Windows 98 users uninterested in browsing to carry software that, while providing them with no benefits, brings with it all the costs associated with carrying additional software on a system. These include performance degradation, increased risk of incompatibilities, and the introduction of bugs. Corporate consumers who need the hardware support and other non-browsing features not available in earlier versions of Windows, but who do not want Web browsing at all, are further burdened in that they are denied a simple and effective means of preventing employees from attempting to browse the Web.

174. Microsoft has harmed even those consumers who desire to use Internet Explorer, and no other browser, with Windows 98. To the extent that browsing-specific routines have been commingled with operating system routines to a greater degree than is necessary to provide any consumer benefit, Microsoft has unjustifiably jeopardized the stability and security of the operating system. Specifically, it has increased the likelihood that a browser crash will cause the entire system to crash and made it easier for malicious viruses that penetrate the system via Internet Explorer to infect non-browsing parts of the system.

Of course most consumers don't realize that they are being harmed, and that is what Bill is praying on. I consider myself among the more severly harmed consumers as Internet Explorer makes me physically ill due to it's low quality and virus-like integration.

User Friendly by Illiad

VERY Interesting facts from the Findings of Fact!

Did you know that...

After releasing Windows 98, Microsoft raised the price charged to OEMs for Windows 95? (62)

In the name of "combating piracy", Microsoft advised OEMs that they would be charged a higher price for Windows unless they drastically limited the number of PCs that they sold without an OS pre-installed? (58)

When Microsoft set the price for Windows 98 they did not even bother to consider the prices of other vendors' Intel-compatible PC operating systems? (62)

Microsoft charges a lower price to OEMs who agree to ensure that all of their Windows machines are powerful enough to run Windows NT for Workstations? (66)

After Netscape Navigator was first announced, Microsoft tried to convince Netscape not to make a Windows version? (79) And later they tried to convince Netscape to design Navigator to rely upon their "Internet-related APIs in Windows 95"  (the Internet Explorer core?)? (81) and perhaps be as little as a "user-interface shell"?  (85)

Microsoft made Intel stop promoting their software that exposed APIs for their Native Signal Processing hardware by pressuring OEMs not to install it, (101) and later made Intel altogether agree to stop developing any platform-level interfaces that might draw support away from  interfaces exposed by Windows?(102)

Microsoft punished the IBM PC Company with higher prices, a late license for Windows 95, and the withholding of technical and marketing support because IBM refused to move its business away from products that themselves competed directly with Windows and Office (OS/2 and SmartSuite)? (115)

When Microsoft managed to bundle Internet Explorer 1.0 with the first version of Windows 95  licensed to OEMs in July 1995 it also included a term in its OEM licenses that prohibited the OEMs from modifying or deleting any part of Windows 95, including Internet Explorer, prior to shipment?

That Gateway had specifically requested that Microsoft provide a way to uninstall Internet Explorer 4.0 from Windows 98? (170)

In 1996, after Compaq removed the MSN and Internet Explorer icons from the desktops on their Presarios to instead promote AOL and Netscape Navigator, Microsoft sent Compaq a letter stating its intention to terminate Compaq's license for Windows 95 if Compaq did not restore the MSN and Internet Explorer icons to their original positions? (206)

About the same time, Compaq announced its intention to work with Netscape for its internal Internet needs and on Internet server initiatives. In response, Microsoft insisted that Compaq support Microsoft's Internet initiatives throughout its business (MS forced them to install IE on all of their computers). (232) Microsoft also threatened Gateway about its own use of Navigator on it's corporate network(236) and they did the same with Apple? (354)

Compaq's license fee for Windows are lower than any other OEMs, they do not have to meet all of the conditions for the lower license fees, and has had free internal use of all Windows products for PCs since March 1998? (234)

Microsoft threatened IBM to make them stop promoting Netscape Navigator, but IBM Refused?(237)(238)

Microsoft promised to give preferential support, in the form of early Windows 98 and Windows NT betas, other technical information, and the right to use certain Microsoft seals of approval, to important ISVs, but only if they use Internet Explorer as the default browsing software for any software they develop with a hypertext-based user interface and they use IEs "HTML Help"? (339)

Microsoft tainted its java tools in such a way that Java applications written with their tools would, unknowingly to the developer, be incompatible with other JVMs and, once written, would be difficult to port, and that they refused to change this until November 1998 when ordered to do do by a court? (394)

Microsoft pressured Intel, which was developing a high-performance Windows-compatible JVM, to not share its work with either Sun or Netscape, much less allow Netscape to bundle the Intel JVM with Navigator? (396)

Microsoft took steps to thwart the creation of cross platform Java interfaces by stopping Intel from helping Sun to develop class libraries that offered cutting-edge multimedia support? (404)

Bill's word is worthless

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