US judge’s finding may end Microsoft’s monopoly over rivals

Jackson wrote that Microsoft “through its conduct toward (competitors) Netscape, IBM, Compaq, Intel and others…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.”

In particular, Microsoft’s refusal to offer computer manufacturers a version of Windows without its Internet browser, Explorer, forced them to ignore consumer preferences forNavigator, a browser developed by Microsoft rival Netscape.

Still, this does not necessarily mean the company will lose the case.

Federal law generally bans companies from maintaining monopoly power through illegal business practices but not from achieving their success selling popular products or making shrewd business decisions. A final ruling could come by the end of the year, with any penalties or remedies spelled out next year.

Microsoft issued a statement calling the judge’s findings “just one step in an ongoing process, with many more steps remaining we’re confident the American legal system will ultimately support our position and that our actions have benefited consumers.”

Jackson could order that Microsoft be broken up into smaller companies that would compete against each other. Or he could choose from a range of lesser punishments, such as requiring Microsoft to allow rivals to sell andimprove its dominant Windows operating system, or prohibiting the company from interfering with newtechnology that could threaten Windows. Appeals are likely to keep the case in court – and delay any punishments – for several years.

The government, which spent $7 million on the lawsuit and used tens of thousands of pages of E-mail and other documents as evidence, sought to portray Microsoft as the industry bully. Justice Department lawyers said the company illegally used its market power to undermine competing technologies and to discourage support for its rivals. The lawsuit by the Justice Department and 19 states accused Microsoft of bullying the industry to help maintain its remarkable influence. Jackson timed the release of his decision to come several hours after US financial markets closed for the weekend.

The success of Microsoft, with $19.7 billion in sales this year alone, rarely wavered during the legal assault. Its stock price more than doubled since the lawsuit was filed and its windows software runs more than 90 percent of computers.

When Forbes magazine last month listed the 400 richestAmericans, three of the top four executives owed their fortunes to Microsoft, including Gates, who turned 44 last week and personally is worth $85 billion.

Reacting to the ruling, Gates said he was confident Microsoft’s integrity would be upheld. “Today’s ruling by the court is part of a long process,” Gates said in a video release. “In the end, we are quite confident Microsoft’s integrity and our belief in innovation, the benefits we provide to consumers, those will be upheld. At the heart of this case, there is a very key principle and that is whether a company is allowed to innovate in its products on behalf of consumers.