U.S.A. v. Microsoft Corp.
United States of America v. Microsoft Corp., U.S. District Court for the District of Columbia, Case Number 94 CV-1564. (U.S. Court of Appeals Case Number 97-5343.)
Nature of the Case. An ongoing proceeding in which the Department of Justice seeks to regulate Microsoft's production and sales of software products, and obtain monetary penalties. The first phase, begun in 1994, was settled in 1995. The Justice Department restarted the matter in October of 1997.
Plaintiff: U.S.A. Attorney: Joel I. Klein, Assistant Attorney General, Antitrust Division, U.S. Department of Justice, 10th St. and Pennsylvania Ave. NW, Washington DC, 20530.
Defendant. Microsoft Corporation, One Microsoft Way, Redmond, WA, 98052-6399, 206-882-8080. Attorneys, John L. Warden, Sullivan & Cromwell, 125 Broad Street, New York, NY, 10004.
Original Proceeding. The United States of America (represented by the Antitrust Division of the Department of Justice) sued the Microsoft Corporation on July 25, 1994 alleging that it was an unlawful monopoly and in restraint of trade in the market for personal computer operating system software, under the Sherman Antitrust Act, 15 USC 1,2. The U.S. further alleged that Microsoft had engaged in anti-competitive marketing practices directed at personal computer manufacturers which pre-install operating systems on personal computers. The U.S. and Microsoft agreed to a consent decree which provided in section IV(E) that "Microsoft shall not enter into any License Agreement in which the terms of that agreement are expressly or impliedly conditioned upon: (i) the licensing of any other Covered Product, Operating System Software product or other product (provided, however, that this provision in and of itself shall not be construed to prohibit Microsoft from developing integrating products)". (Parentheses in original.) This August 21, 1995 consent decree temporarily ended the court proceedings against Microsoft.
Second Proceeding. The U.S. went back to the court on October 20, 1997. With much publicity it filed a petition asking the court to hold Microsoft in contempt of the consent decree. It requested that Microsoft be fined one million dollars per day, and be enjoined from certain sales. The U.S. alleged in this proceeding that Microsoft, in its licensing agreements with personal computer manufacturers, required that as a pre-condition for installing Windows 95, they also install MSIE. The U.S. alleged that this constitutes a tying agreement in violation of the consent decree. The U.S. alleged that MSIE constitutes an "other product" within the meaning of section IV(E) of the consent decree. Microsoft responded that MSIE constitutes an "integrated product" under the consent decree, and hence, that it had not violated the decree. Judge Jackson ruled December 11 that Microsoft was not in contempt of the consent decree, but that Microsoft might not be in compliance with the consent decree. He ordered that determination of facts and law in dispute be referred to a Special Master, and issued a preliminary injunction barring Microsoft "from the practice of licensing the use of any Microsoft personal computer operating system software (including Windows 95 or any successor version thereof) on the condition that the licensee also license and preinstall any Microsoft Internet browser software (including Internet Explorer 3.0, 4.0, or any successor versions thereof) ..." (Parentheses in original.) See, 980 F. Supp. 537. In a separate order, he appointed Lawrence Lessig Special Master. On January 22, 1998, Microsoft and the U.S. stipulated to an order whereby Microsoft would allow computer manufacturers licensed to preinstall Windows 95 certain options regarding preinstalled software.
Appeal Proceeding. Microsoft immediately appealed the December 12 decision of District Court Judge Jackson to the Court of Appeals. Microsoft sought and obtained an expedited interlocutory appeal. Oral argument before the Appeals Court was held on April 21,1998. On June 23, 1998, the Court of Appeals reversed the preliminary injunction and the appointment of the Special Master, Lawrence Lessig.
Chronology with Links to Pleadings and other
Some links to pleadings are to either the DOJ or Microsoft websites