US federal judge determines Microsoft has monopoly power

A US federal judge ruled last night that Microsoft has monopoly power in the market for personal computer operating systems, a finding quickly hailed by the government as "an important victory".

The determination came in a finding of fact issued here by US District Court Judge Thomas Penfield Jackson in an anti-trust case brought against the software giant by the US Justice Department. The judge said there were three main facts "indicating that Microsoft enjoys monopoly power."

"Microsoft's share of the market for Intel-compatible personal computer operating systems is extremely large and stable.

"Second, Microsoft's dominant market share is protected by a high barrier of entry.

"Third, largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows."

The US government had accused Microsoft of abusing its market dominant position, secured through its Windows operating system, in order to harm competitors. At one point in the document Judge Jackson said Microsoft had controlled "at least 95 per cent" of the operating systems market for the past two years.

Judge Jackson's findings were largely limited to an interpretation of the facts submitted to his court in a trial that opened here on October 19th, 1998. His conclusions of law in the matter will be issued later.

"We are enormously pleased by the court's decision," said Mr Joel Klein, head of the US Justice Department's anti-trust division. "The judge found what the department charged, which is that Microsoft is a monopolist and has engaged in massive anti-competitive practices that harmed innovation and limited consumer choice. This is truly an important victory for American consumers and for the American economy." But the ruling does not necessarily mean the company will lose the case. Federal law generally bans companies from maintaining monopoly power through illegal business practices, but not from achieving their success selling popular products or making shrewd business decisions.

Microsoft issued a statement calling the findings "just one step in an ongoing process, with many more steps remaining. We're confident the American legal system will ultimately support our position and that our actions have benefited consumers."

A final ruling could come by the end of the year, with any penalties or remedies spelled out next year.

Judge Jackson could order that Microsoft be broken up into smaller, competing companies. Or he could choose from a range of lesser punishments, such as requiring Microsoft to allow rivals to sell and improve its dominant Windows operating system, or prohibiting it from interfering with new technology that could threaten Windows.

Appeals are likely to keep the case in court - and delay any punishments - for several years.

The government has spent $7 million (€6.7 million) on the lawsuit and used tens of thousands of pages of e-mail and other documents as evidence.