The Antitrust Revolution: Economics, Competition, and Policy

By John E. Kwoka Jr.; Lawrence J. White | Go to book overview

CASE 19
Maintenance of Monopoly:
U.S.v. Microsoft(2001)

Daniel L. Rubinfeld


INTRODUCTION

In May 1998, the U.S. Department of Justice (DOJ), twenty individual states, and the District of Columbia filed suit against the Microsoft Corporation claiming that Microsoft had monopolized the market for personal computer (PC) operating systems and had used its monopoly to engage in a wide range of antitrust violations.1 The case was tried in Federal District Court from October 19, 1998, through June 24, 1999. The court reached its findings regarding the facts of the case on November 5, 1999, and its legal conclusions on April 3, 2000. Microsoft's appeal to the Circuit Court of Appeals for the District of Columbia was decided on June 28, 2001, followed by extensive settlement discussions among the various parties—the Department of Justice, the states, and Microsoft. The appellate court affirmed the monopolization claim, reversed other findings by the district court, and remanded the case back to the district court to find an appropriate remedy. Following extensive settlement discussions among the various parties— DOJ, the states, and Microsoft—DOJ and Microsoft reached a settlement agreement. Nine states opted not to join the settlement, proposing a different remedy. A 32-day remedy trial was held, and, on November 1, 2002 the district court issued a remedy ruling. As this case study is going to press, it

Daniel Rubinfeld served as Deputy Assistant Attorney General for Economics at the U.S. DOJ
from June 1997 through December 1998 and as a consultant to the Department of Justice in its case
against Microsoft through most of 1999. He wishes to thank Franklin Fisher and the editors for
helpful comments.

1U.S. v. Microsoft, Civil Action No. 98–1232. One state settled with Microsoft before the case went
to trial.

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