Microsoft, ABD adalet bakanligi: ilk karar: MS monopol'dur

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Subject: Microsoft, ABD adalet bakanligi: ilk karar: MS monopol'dur
From: Mustafa Akgul (akgul@Bilkent.EDU.TR)
Date: Sat 06 Nov 1999 - 20:13:20 EET


Bilgilerinize!
Saygilar
Mustafa Akgul

%Kararin tam metnin bir kopyasi
http://akgul.bilkent.edu.tr/%7Eakgul/ms-dos/findfact.html
olarak okuyabilirsiniz.

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This story was printed from ZDNN,
located at http://www.zdnet.com/zdnn.
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Judge drops hammer on MS 'monopoly'
By Charles Cooper, ZDNN
November 5, 1999 3:50 PM PT
URL: http://www.zdnet.com/zdnn/stories/news/0,4586,2389415,00.html

Story updated at 9:40 PM PT

When it opens for business Monday morning, Microsoft will still be the
most powerful software company in the world and Bill Gates will remain
its richest inhabitant.

Nothing has changed. And yet, everything has changed.

Late Friday, Microsoft (Nasdaq:MSFT) suffered a crushing defeat when the
presiding judge in its historic antitrust trial determined that the
company had wielded monopoly power like a club -- to bash its competition
and bludgeon innovation.

In his 207-page findings of fact, Judge Thomas Penfield Jackson backed
the government's main charges against the software maker - virtually in
toto. And in so doing, he foreshadowed how he might rule when the time
comes to determine whether Microsoft broke the law.

The scope of the defeat was surprising, if not shocking, according to
analysts and even some of the participants. Prior to the release of the
Judge's decision, officials on both sides privately acknowledged they
might lose a few while the other side might win a few.

But nothing like this.

"This is a tremendous victory for America's consumers," said antitrust
chief Joel Klein at a Washington press conference that resembled a
victory celebration. "Microsoft is a monopolist and it engaged in massive
anti-competitive practices that harmed innovation and limited
competition. It shows once again that in America, no person and no
company is above the law."

   For the most part, the DOJ's triumph didn't surprise industry players.
   Almost without exception, long-time Microsoft rivals reacted by saying
they'd expected to see Microsoft declared a bullying monopolist. "The
ruling confirms what we all know," said Novell CEO Eric Schmidt. "Most
people would say they're a monopoly on the desktop...[But] the position
that Microsoft has should not allow it to do something in other markets."
Microsoft's response was muted. Company officials expressed confidence in
their chances for prevailing. At the same time, Gates appeared to offer
an olive branch, inferring, at least by some interpretations, that room
existed for finding an out-of-court settlement. He said Microsoft was
ready to find a way to resolve the case in a way that was "fair to
Microsoft, fair to the government and most of all fair to consumers."

For now, though, Microsoft's fate remains in the hands of a judge who
legal experts believe is all but ready to throw the book at the company.

Microsoft's lawyers argued heatedly during the course of the 76-day trial
that the company was not a monopolist. They also disputed the
government's charge that Microsoft had sought to choke off outlets of
distribution for a competing Internet browser made by Netscape
Communications Corp.

Mincing no words
But in his ruling, the judge was having none of that. Jackson said
Microsoft had used its position to harm consumers and rivals.

What's more, he said Microsoft continued to enjoy an "extremely large and
stable" portion of the market for software operating systems. In fact,
Jackson said Microsoft was so dominant in the market for Intel-based
operating systems "that if it wished to exercise this power solely in
terms of price, it could charge a price for Windows substantially above
that which could be charged in a competitive market."

Contradicting the arguments offered by Microsoft's lawyers, Jackson
concluded that the company's share of Intel-compatible PC operating
systems was "extremely large and stable" and protected by a high barrier
to entry. As a result, he said, Microsoft's customers "lack a
commercially viable alternative to Windows.''

That could be an especially troubling harbinger for Microsoft because
Jackson wrote that Microsoft had harmed consumers in immediate and easily
discernible ways.

"They have also caused less direct but nevertheless serious and
far-reaching consumer harm by distorting competition," according to
Jackson.

Ever since the lawsuit was filed in May 1998, Microsoft has argued that
the company was being penalized for aggressive but not illegal behavior.
In direct testimony and depositions, they pointed to the growing
emergence of old and new rivals to Microsoft's power, such as Linux and a
newly powerful America Online Inc. (NYSE:AOL). But in painting Microsoft
as willing to use its power to harm other firms, Jackson has laid the
groundwork for concluding that the company broke the law.

"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," Jackson wrote.

Winning appeals
An appeals court that could eventually hear the case already has sided
with Microsoft twice. In 1995, the U.S. District Court of Appeals for the
D.C. Circuit overturned a decision by Federal Judge Stanley Sporkin, who
had refused to sign a consent decree between Microsoft and the DOJ
because he felt it wouldn't rein in the company. And in 1998, the appeals
court reversed another anti-Microsoft ruling, this one by Judge Jackson.
In that ruling the appeals court declared that Judge Jackson was wrong in
ordering the company to unbundle its Internet Explorer browser from
Windows 95. Microsoft may well take its chances for a third exoneration,
pushing forward without settling.

Reached by telephone, one of the two lead prosecutors in '(Microsoft
the case, Stephen Houck, said the judge's decision was a has) also
slam-dunk for the government. caused less
                                                            direct but
"It's everything I possibly could have hoped for," he nevertheless
said. "It's a closely reasoned decision that on no serious and
uncertain terms portrays Microsoft as an abusive far-reaching
monopoly." consumer harm
                                                            by distorting
Houck, who returned to private practice after competition.'
participating in the final round of verbal presentations
by the two sides earlier this fall, said he detected a -- Judge
change of tone in reading Microsoft's initial statements Thomas
following the ruling. Penfield
                                                            Jackson
Settlement mode?
"Gates sounds more conciliatory than in the past," he
said.

However, Houck was uncertain whether the weight of the ruling would
provide an extra incentive to Microsoft to settle.

"In the past, what Microsoft has proposed has not been sufficient to
allay the concerns we had," he said.

Other trial-watchers remained just as unconvinced that the ruling might
draw the two sides together. Indeed, some, like antitrust attorney
Stewart Gerson, suggested Microsoft might opt to roll the dice and take
its chances with an appeals court.

Gene Crew, an attorney with Townsend, Townsend & Crew agreed. "The judge
just really rips Microsoft's arguments," said Crew, who has represented
plaintiffs in a private antitrust case against Microsoft. "But they're
not in settlement mode."
 
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