Judge Thomas Penfield Jackson said Microsoft's attempts to protect its dominant status in the PC operating system market have actually harmed consumers, and he accused Microsoft of bullying Compaq and other PC manufacturers.
In his findings of fact, Jackson chastised Microsoft for creating a barrier of entry to the market that forced consumers to use Windows, and specifically to use Internet Explorer with Windows 98.
He accused Microsoft of bullying Compaq, and other original equipment manufacturers (OEM's), into forcing consumers to use the Microsoft browser, and he chastised Microsoft for stifling innovation by pressuring Intel and other companies to drop development of competing technologies.
Consumers have no commercially viable alternative to Windows, partly because of a network effect in which developers are rewarded for writing applications for the dominant operating system; while consumers want the operating system that has the most applications. This, coupled with the fact that Microsoft's 95 per cent share in the operating system market is "dominant, persistent and increasing", keeps competitors out, the judge concluded.
Microsoft's actions "unjustifiably" distorted competition," he wrote. By squashing competition from Navigator, Microsoft has "retarded and perhaps altogether extinguished" the process by which Sun Microsystem's Java programming technology, and Netscape's Navigator could have introduced more competition.
By refusing to offer PC manufacturers a version of Windows without Internet Explorer included, and by preventing them from removing the browser, Microsoft: "forced OEMs to ignore consumer demand for a browserless version of Windows." By ensuring that IE would launch in certain circumstances in Windows 98 even if Navigator were set as the default, Microsoft "created confusion and frustration for consumers and increased technical support costs for business customers".
Windows users who did not want the browser had to remove the icon, and still it launched in certain circumstances. They also had to: "content themselves with a PC system that ran slower and provided less available memory than if the newest version of Windows came without browsing software," Jackson said.
Enticing firms into exclusivity arrangements with valuable inducements that only Microsoft could offer: "forced consumers who preferred Navigator to pay a substantial price (in the forms of downloading, installation, confusion, degraded system performance and diminished memory capacity) or content themselves with Internet Explorer," the judge wrote.
By pressuring Intel to drop the development of native signal processing software and cut back on its software development efforts, Microsoft deprived consumers of software innovation that they might have found valuable, had the innovation been allowed to reach the marketplace. "None of these actions had pro-competitive justifications," he wrote.
"Microsoft's conduct toward Netscape, IBM, Compaq, Intel, and others, demonstrated that it will use its immense market power and profits to harm any firm that tries to compete against it."
Now the findings of fact judgement has been reached, speculation has begun as to what sentence the Judge will pass. This final deliberation is expected in January 2000.
For more information, the US Government printing office has put up a Web page for downloading the findings against Microsoft, available in Word Perfect, HTML and PDF formats.