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>Microsoft got into trouble for bundling a web browser, But to clarify, Microsoft ultimately won the case on appeal and had the initial ruling against them ov

• nodamage 6y ago
  > But to clarify, Microsoft ultimately won the case on appeal and had the initial ruling against them overturned.[1] This is an oversimplification of the appeal, as while the penalty against Microsoft was overturned, the appeals court did affirm several of the antitrust violations against Microsoft. In particular: 1. The appeals court affirmed that Microsoft's license restrictions preventing OEMs from pre-installing alternate browsers violated the Sherman Act. 2. The appeals court found that Microsoft's technical integration of IE and Windows was not a violation of the Sherman Act because Microsoft offered legitimate justification for why the integration was necessary. (When a defendant offers a legitimate justification the burden of proof shifts back to the plaintiff to show that the anticompetitive effect outweighs the justification. In this case the appeals court found the DOJ failed to do this.) 3. The appeals court affirmed that Microsoft's deals with ISPs to promote IE at the expense of other browsers violated the Sherman Act. 4. The appeals court affirmed that Microsoft's deal with Apple to bundle IE with Mac OS in exchange for the development of the Mac version of Office violated the Sherman Act. (Bill Gates threatened to pull Office for Mac if Mac OS bundled Netscape instead of IE.) 5. The appeals court did not actually address whether tying IE to Windows was an antitrust violation or not. They concluded that it could not be a per se violation, and the issue was remanded back to the district court for further analysis under the rule of reason which would have required additional proceedings, which never happened as Microsoft and the DOJ eventually settled. 6. The appeals court found that the DOJ failed to prove their claim that Microsoft attempted to monopolize the browser market, largely because they failed to provide sufficient evidence that Microsoft had a "dangerous probability" of success. Finally, the reason the penalty was overturned by the appeals court largely had to do with the district court judge not following the correct legal procedures and failing to reasonably justify why such a large penalty (breaking up the company) was warranted. Plus they were really unhappy with that judge going and talking to the media about the case. Yes, ultimately Microsoft was not broken up. After Bush was elected, DOJ policy changed and they decided to no longer pursue the breakup. But it's a bit misleading to say they won the appeal. It's more like: they won a couple claims, they lost a bunch of claims, and the overall penalty was deemed too harsh. (Note: I skipped some details but the full text of the appeal is an interesting read: https://scholar.google.com/scholar_case?case=17987618389090921096 https://scholar.google.com/scholar_case?case=179876183890909...) --- That all being said, it's worth noting that most of the violations affirmed were related to Microsoft's attempts to unlawfully maintain their operating system monopoly which at the time had over 95% market share, not due to their attempts to dominate the browser market. And it's possible that if they had merely included IE with Windows and not taken extra actions to force other companies (OEMs, ISPs, Apple) to bundle IE over Netscape, they may not have have been found liable at all. As applied to the current situation with Apple, it's unlikely that Apple will be exposed to the same liability because they simply don't have the level of monopoly power that Microsoft did at the time.
• dane-pgp 6y ago
  > But to clarify, Microsoft ultimately won the case on appeal and had the initial ruling against them overturned. To further clarify, the EU antitrust authorities decided not to let off Microsoft with a slap on the wrist for their bundling practices: https://en.wikipedia.org/wiki/BrowserChoice.eu https://en.wikipedia.org/wiki/BrowserChoice.eu
• MR4D 6y ago
  > ...Apple Inc actually has decades of case precedent to support the idea that Apple controls its own hardware with its own exclusive app store... This was true for AT&T at one time as well. I agree with your point, but things change when you get too big. Apple might be at that point, but I don't really know, and IANAL.
• sbuk 6y ago
  There is a huge difference here; there was never a legal issue with bundling IE. The problem was that MSFT threatened to withdraw OEM licensing for companies that bundled alternative browsers with Windows. Monopoly wasn't the issue. Abusing the monopoly (desktop OS) to leverage influence on another market segment (web browsers) is what go them into trouble.
  • jasode 6y ago
    >; there was never a legal issue with bundling IE. I suppose 20+ years has erased a collective memory of the conflicts with IE. Here is a relevant 1998 excerpt[1] from DOJ's own official website: >The Department today filed a motion seeking a preliminary injunction that would: >-- Require that if Microsoft insists on including its browser on Windows 98, it must also include Netscape's browser so that consumers will have a real choice. Computer manufacturers would have the option of deleting either browser. If Microsoft does not want to include Netscape, it must unbundle its own browser and let it compete on the merits. As we now know from the 2001 final settlement, the above scenario didn't happen and Microsoft won that IE battle. Can one do a mental search & replace with s/Microsoft/Apple/ and s/Netscape/Epic/ such as: "Require that if Apple insists on including its App Store on iPhones, it must also include Epic App Store so that consumers will have a real choice." If Epic's lawyers (not even the intimidating government DOJ lawyers this time but just a private video game company's lawyers) want to argue the same idea as forcing Netscape onto IE, what would be the new legal argument this time? The previous one failed. EDIT to sbuk's reply about context: your excerpt trying to show context is itself also missing context. That part about PC manufacturers licensing was the past actions that got the DOJ up to that point of hauling them into court. My excerpt was about the DOJ's proposed future remedy (e.g. must unbundle IE) to reduce Microsoft's future monopoly power -- and that didn't happen. See the very next bullet point below your "context": >• Microsoft now intends to tie unlawfully its IE Internet browser software to its new Windows 98 operating system, the successor to Windows 95. DOJ wanted to stop the future IE bundling to Windows 98. They failed. [1] https://www.justice.gov/archive/atr/public/press_releases/1998/1764.htm https://www.justice.gov/archive/atr/public/press_releases/19...
    • romanoderoma 6y ago