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Antitrust and the Internet:

Overview
Intuit and Microsoft
Sun v. Microsoft
The DOJ v. Microsoft

Overview

If we adhered to a policy of only presenting legal topics which had utility for the visitors to this site, we’d skip Justice and the Attorneys General vs. Microsoft, since it’s not likely that many companies will have legal problems resembling Microsoft’s: there don’t seem to be any budding monopolists on the scene. However, the outcome of the dispute matters to everyone who uses the Internet, and most users have an opinion about it.

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Intuit and Microsoft

Microsoft has an operating system monopoly. Its control of the desk-top is also secure. It is worth recalling that the government’s first warning shot was its objection to Microsoft’s proposed acquisition of Intuit, the maker of Quicken, back in 1995. If Intuit had not been busy developing on-line financial service products, would there have been an objection, to protect the desktop financial planning software market? Not likely. Online banking was the concern, as the Department of Justice noted in its summary of its challenge.

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Sun Microsystems, Inc. v. Microsoft Corporation

Sun’s suit against Microsoft for "corrupting" Java by tailoring it to Windows - putting poison in the cup of coffee, as Scott McNealy tells it - is also about preventing Microsoft from exercising dominion over the Internet, and also, just possibly, chipping away at its hegemony over the desk top.

This is why the "Noise" camp - Netscape, Oracle, IBM, and Everybody Else - has rallied around Java. The group, led by IBM at the moment, is "pushing Java as a way to attack Microsoft from below and above, by enabling servers, instead of PCs, to run applications, and by linking those applications to a myriad of non-PC devices [which] could account for more than one-third of all the devices hooked to the Internet by 2001." David Bank, "Rivals of Microsoft", Wall Street Journal, Nov. 19, 1998, p. 1. The November 17, 1998 Preliminary Injunction Order in favor of Sun, preventing Microsoft from continuing to "poison" Java by including nonconforming keywords and compiler directives, is a major victory.

The battle rages on, however. On January 14, 1999, Microsoft lodged its appeal of that order. More recently, Judge Whyte issued tentative rulings on three of Sun's ten summary judgment motions. In one ruling, Judge Whyte indicates that several of Microsoft's products, including Windows98 and IE 4.0, infringe Sun's Java source code copyrights, but in another he suggests that under certain conditions, Microsoft may develop and market "independently developed Java technology." A recent ZDNet special report provides updated information and many useful links regarding this lawsuit.

In addition, Professors Mark Lemley and David Mc Gowan surveyed the technical and legal landscape of this battle in their paper, "Could Java Change Everything? The Competitive Propriety of a Proprietary Standard," published in February, 1998, as described in the abstract.

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Department of Justice v. Microsoft

There is way too much coverage of this battle for us to add to the discussion. For a good commentary, look at the Seattle Times’ running account. They know Microsoft well, and they maintain a posture which is not abjectly prostrate before the Giant. The San Jose Mercury News has the cutest site and, as might be expected, the Department of Justice site puts much of the case on-line.


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