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14 Berkeley Tech. L.J. 303 (1999)
United States v. Microsoft

handle is hein.journals/berktech14 and id is 311 raw text is: SHERMAN ACT VIOLATIONS: MONOPOLIZATION

UNITED STATES V. MICROSOFT
By Michael Woodrow De Vries
The competitive practices examined in United States v. Microsoft1 give
rise to important questions about the limits of competitive behavior and
the role of antitrust laws in preserving competition in the information in-
dustries. Microsoft's practice of requiring purchasers of its operating sys-
tem software, Windows 95,2 also to license its browser software, Internet
Explorer (IE), prompted the litigation that  ave rise to the court's opin-
ion in Microsoft. Under the antitrust laws, tying arrangements-ar-
rangements that condition the sale of the tying product on an agreement
also to purchase the tied product-are per se illegal, provided that certain
conditions are met.4 As the Supreme Court has explained, certain tying
arrangements pose an unacceptable risk of stifling competition and there-
fore are unreasonable 'per se.''5 Despite the threat to competition in the
browser market posed by Microsoft's Windows 95-EE licensing practices,
however, the D.C. Circuit essentially found that the Windows 95-IE prod-
6
uct combination was not an illegal tying arrangement. By ineffectively
accounting for the disruption or elimination of competition in the market
for browsers, the D.C. Circuit allowed Microsoft to use its market power
© 1999 Berkeley Technology Law Journal & Berkeley Center for Law and Technology.
1. United States v. Microsoft, 147 F.3d 935 (D.C. Cir. 1998). This opinion repre-
sents only one segment of the Justice Department's much broader and ongoing (as of this
writing) antitrust case against Microsoft.
2. Windows 95 is an operating system software produced and distributed by Mi-
crosoft. See id. at 3. Microsoft's operating system is installed on millions of personal
computers, see id. at 4, and, consequently, Microsoft has a recognized monopoly posi-
tion in the operating systems market. Mark A. Lemley & David McGowan, Legal Impli-
cations of Network Economic Effects, 86 CALIF. L. REv. 479, 502 (1998). See also Mark
A. Lemley, Antitrust and the Internet Standardization Problem, 28 CONN. L. REv. 1041,
1048 (1996) ([Microsoft] has sold more than 80% of the personal computer operating
systems in existence in the market.).
3. The primary purpose of the antitrust laws is to protect competition. See Grap-
pone, Inc. v. Subaru of New England, Inc., 858 F.2d 792, 794 (1st Cir. 1988) (Breyer, J.)
([Tlhe antitrust laws exist to protect the competitive process itself ... in order to help
individual consumers by bringing them the benefits of low, economically efficient prices,
efficient production methods, and innovation.)
4. See Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 462
(1992).
5. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 9 (1984).
6. See Microsoft, 147 F.3d at 952.

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