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Tuesday
4 April 2000
Judge finds Microsoft
guilty of crushing its rivals
MICROSOFT Corporation was found guilty last night of breaking the law by using its monopoly to stifle competition and crush its rivals. The stinging judgment by an American district judge set up a new round of hearings to determine what punishment to impose on the software giant founded by Bill Gates, including whether it should be broken up. The case could go on for years. Microsoft stock took a hammering during the day as the decision was anticipated, losing £46 billion, about 15 per cent of its value. Until last week it was the world's largest company. By the time Judge Thomas Penfield Jackson had announced his decision, it had slipped to third. The judge said that the company had violated anti-trust laws by using its position to "monopolise the web browser market" to the detriment of competitors. It had imposed "technological shackles" on other software companies and had stifled rather than fostered innovation. The "true impetus" behind Microsoft's business practices had been its own commercial benefit. The company had placed "an oppressive thumb on the scale of competitive fortune" and employed an "army of tactics" that not only damaged its competitors but also the company itself in the short term. The 43-page judgment did not specify the penalties or "remedies" to be imposed. These are likely to be announced in October. Mr Gates, 44, the company's multi-billionaire chairman and a ruthless competitor, appeared defiant after the judgment. Expressing his pride in Microsoft, he said that the company had "a strong case on appeal". He said: "Microsoft must innovate to prosper; that's what Microsoft will do." The judge found that the company could be liable to be sued under anti-competition laws. He accepted 23 of 26 arguments brought by the 19 states that joined the American government in the case. The trial began in 1998 but concerned allegations of unfair business practices that dated from the beginning of the decade. During it, Mr Gates's video evidence had made him appear evasive and hostile. Talks between Microsoft and the government collapsed last week after the company insisted that it should be allowed to add new elements to its software products without government interference. Although Microsoft could face being broken up into separate companies,
its influence is so pervasive that this is unlikely to be practicable.
However, Mr Gates fears that its future operations could be severely hampered
by new constraints.
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