08S7C's Economics Blog

Microsoft

Tuesday, August 10, 1999 Published at 20:37 GMT 21:37 UK

Business: The Company File
Microsoft war of words continues


The Department of Justice has accused Microsoft of being a monopoly The US Justice Department has reiterated charges that Microsoft acted unlawfully to wipe out competition in the personal computer operating systems market in order to preserve its monopoly.

Microsoft fired back by claiming that the US Government had failed to prove its claims against the software giant in a prolonged trial that began last October.

The war of words came as both sides handed in hundreds of pages of papers to US District Court Judge Thomas Penfield Jackson. The submissions are designed to summarize each side's version of the facts.

The papers mark the beginning of the end of a titanic tussle between the US Government and the largest company in the world.

Judge Thomas Penfield Jackson will now give Microsoft and the Department of Justice one month to study each other's documents and come back to him with any changes.

After final courtroom arguments, he will give his ruling, probably late this year, but possibly not until early in 2000.

Settlement unlikely

There is still a possibility that an out-of-court settlement could be reached. The sides have met several times since the trial began in October, but observers think it unlikely that they will come to an agreement.

Microsoft is accused of illegally using monopoly power in the software industry to crush potential rivals.

It is likely to argue in its court filing this week that there has been no evidence that its actions have hurt consumers, which would have to be proved to support a guilty verdict.

Netscape has now been bought by AOL - evidence, says Microsoft, of how competitive the market is.

It is also essential to prove that a company wields monopoly power, which Microsoft disputes. It will argue that it did not illegally discourage computer makers and Internet providers from using Web browsers made by its rival Netscape.

And it will maintain that America Online's purchase of Netscape demonstrates how competitive the market is.

The government contends that Microsoft does hold monopoly power, and that computer makers and the public have no mainstream operating system alternative and must accept its prices.
It claims the company choked Netscape's avenues of distribution.

posted by Anonymous @ 3:19 AM