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Bus-670-Legal-Environment

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Running Head: ANTITRUST VIOLATIONS
Antitrust Violations of Microsoft
Ashford University
BUS 670 Legal Environment
Ms. Rachael Lenzmeier Jencks
April 8, 2012

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Running Head: ANTITRUST VIOLATIONS
In January, 2002, AOL Time Warner filed a private antitrust lawsuit against Microsoft
Corporation. Prior to that, in 1998, the United States of America had also filed suits against
Microsoft for violation of antitrust laws. The basis for the filings was that Microsoft had not
obtained or maintained their monopoly by competitive advantages, but by illegally developing
entry barriers for other companies (Anonymous, 2003). The lawsuit by the United States alleged
that Microsoft had prevented competitors from developing and selling operating systems by
“exclusionary conduct” (United States v. Microsoft Corporation, 1998). Specifically, Microsoft
built-in Internet Explorer in a way that it could not be removed by the user, and prevented the
use of Netscape Navigator on its operating system. They also “attempted to mislead and threaten
software developers” to prevent competition (United States v. Microsoft Corporation, 1998). The
private lawsuit by AOL Time Warner was along the same lines, because Microsoft prevented the
use of this company’s web browser, the company was unable to compete in a very large market.
The court’s first task was to determine if Microsoft did indeed hold a monopoly of the
market. According to an article in Strategic Direction, Microsoft controlled over 90 percent of
sales over the previous seven years and is the sole leader setting prices for other competitors in
the market (Anonymous, 2003). Microsoft lost the lawsuit brought on by the United States. The
court battle between the U.S. and Microsoft went all the way to the Supreme Court and
Microsoft still lost the battle after all appeals were exhausted. The final judgment was entered in
2002 and modified in 2006. The final judgment is very lengthy, but in short, Microsoft was
prevented from future endeavors that may violate any antitrust laws. This included prevention of
competitors from developing software or middleware that may work with the Windows operating
system, and also ordered that Microsoft cannot join in exclusive contracts with other companies
that requires that company to develop software that works solely with Windows. According to

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 Antitrust Violations of Microsoft Ashford University BUS 670 Legal Environment Ms. Rachael Lenzmeier Jencks April 8, 2012 In January, 2002, AOL Time Warner filed a private antitrust lawsuit against Microsoft Corporation. Prior to that, in 1998, the United States of America had also filed suits against Microsoft for violation of antitrust laws. The basis for the filings was that Microsoft had not obtained or maintained their monopoly by competitive advantages, but by illegally developing entry barriers for other companies (Anonymous, 2003). The lawsuit by the United States alleged that Microsoft had prevented competitors from developing and selling operating systems by “exclusionary conduct” (United States v. Microsoft Corporation, 1998). Specifically, Microsoft built-in Internet Explorer in a way that it could not be removed by the user, and prevented the use of Netscape Navigator on its operating system. They also “attempted to mislead and threaten software developers” to prevent competition (United States v. Microsoft Corporation, 1998). The private lawsuit by AOL Time Warner was along the same lines, because Microsoft prevented the use of this company’s web browser, the company was unable to compete in a very large market. The court’s first task was to determine if Microsoft did indeed hold a monopoly of the market. According to an article in Strategic Direction, Microsoft controlled over 90 percent of sales over the previous seven years and is the ...
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