Microsoft stifled innovations: US Judge

By : |November 7, 1999 0

Software giant Microsoft on Friday suffered a major setback when a US Judge hearing the Department of Justice antitrust case against it, stated that Microsoft did hold monopoly in the operating systems market for Intel-based personal computers.

Although the judge’s comments were not a judgement, they are considered to be significant in the landmark antitrust trial, tilting the case against the world’s largest software company. US District Judge Thomas Penfield Jackson remarked that “Microsoft enjoys monopoly power in the relevant market”. He also held Microsoft founder and chairman Bill Gates responsible for strong arming companies into agreeing to Microsoft’s demands.

Bill Gates rejected the conclusions. “If you want to look at what’s great for consumers you have to look at our work and the work of our partners over the last 20 years,” Gates said. “The law couldn’t be more black and white…The kind of innovation we do is absolutely encouraged.”

In his 207 pages long comment, Judge Jackson said, “Most harmful of all is the message that Microsoft’s actions have conveyed to every enterprise with the potential to innovate in the computer industry.”

“Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft 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,” the Judge remarked.

On Friday, Microsoft shares fell five per cent to 87-1/16 in after-hours trade, and analysts expect another 5-10 per cent drop when trading resumes on Monday.

Bill Gate’s company now has the option of either challenging the Judge’s findings or go in for a out of court settlement with the DOJ and 19 US states who have together filed the antitrust case against it.

Analysts do not expect the case to come to a conclusion in the near future. Going by the series of steps involved, the case if expected to be dragged into 2001 before a decisive outcome is seen. However, the finding of Judge Jackson is considered to be harsher than what was anticipated.

For the time being, there is joy in the rival gang, which sees the development as an opportunity for more innovation in the operating system market.

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