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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek technology

NOVEMBER 19, 1999 VOL. 25 NO. 46

From the Web
Breaking Windows

    ALSO IN ASIAWEEK
Riding the Waves
Japan re-invents the flotation device

From the Web
Breaking Microsoft's Windows

Microsoft is a monopoly. Okay, it's hardly Earth-shattering news. But on Nov. 5, Judge Thomas Penfield Jackson made the long-muttered accusation a matter of legal fact. In a preliminary report on the antitrust trial against the software giant, Jackson determined that Microsoft used the dominance of its Windows operating system as a cudgel against competitors, stifling innovation and limiting consumer choice.

While the judge's findings of fact are not a final verdict, they are a damning blow for Microsoft - whose defensive arguments Jackson almost universally dismissed as "specious." Most damaging was his assertion that "Web browsers and operating systems are separate products." It was Microsoft's decision to integrate its Explorer browser into Windows, to grab market share from rival firm Netscape, that sparked the U.S. government's year-long antitrust suit. Microsoft claims that it bundled the two products to improve user experience. Judge Jackson said that the move actually harmed consumers, concluding that adding Explorer to Windows "unjustifiably jeopardized the stability and security of the operating system."

The 207-page report, which Jackson fittingly chose to release by e-mail, strongly suggests that he will rule in favor of the government in his final verdict, expected around March. If the judge finds Microsoft guilty of violating antitrust laws, possible punishments range from imposing minor changes on the firm's business practices right up to the unlikely option of breaking up the company.

Microsoft's stock price dropped 8% on the news before making a partial recovery. Chief 'softie Bill Gates, left, said he "respectfully disagreed" with the findings and an appeal is sure to follow. But by coming down so unequivocally against Microsoft, Jackson put pressure on Gates to settle with the government. If Microsoft can do that before the final verdict is delivered, the findings of fact could be expunged - and a slew of possible lawsuits from competitors, founded on the legal recognition of Microsoft as a monopoly, could be avoided. If Gates chooses a fight to the death, it could take three years and a trip to the Supreme Court before we have a final winner.

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