Friday, November 5, 1999 Published at 23:58 GMT
Business: The Company File
Monopoly blow for Microsoft
Smiles all round for US justice officials
A US federal judge has ruled that Microsoft wields monopoly power in personal computer operating systems - a major setback for the US software giant in one of the biggest antitrust cases this century.
In a 207-page document of facts established at the 76-day trial, Judge Thomas Penfield Jackson said Microsoft's actions had harmed consumers and that the US software giant had used its power to punish competing firms.
"The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft's self-interest," he added.
The US Justice Department and 19 US states had charged Microsoft, the world's biggest software company, with abusing its monopoly power in order to sell more copies of its own internet browser and damage the business prospects of the rival Netscape Navigator browser.
One of the issues on which the judge took Microsoft to task was its pricing behaviour.
Judge Jackson noted that one of Microsoft's own studies from November 1997 confirmed that the company could have charged only $49 for an upgrade to Windows 98 and still remained profitable.
However the study found that the company had sufficient power within the market to charge the "revenue-maximising" price of $89, the judge said.
The Justice Department hailed Friday's ruling as a "tremendous victory" for US consumers.
But a spokesman for the states who joined the action, Connecticut Attorney-General Richard Blumenthal, went further, saying that Microsoft should face far-reaching sanctions.
A Microsoft spokesman said the company disagreed with many of the findings and vowed to continue to vigorously fight the case.
He said: "We hope we can find a way to resolve this and put it behind us.
"We think there has certainly got to be a way to resolve it that is fair to Microsoft, fair to the government and most of all fair to consumers."
This is not the end of the case, as the judge will not make a final determination of who has won the case for several months.
The two sides will have one month from Friday's finding of fact to issue their "conclusions of law" as to how it relates to US anti-trust law.
Only then, probably in the first three months of 2000, would the judge issue his "ruling of law", stating whether Microsoft was guilty of violating competitive practices.
Legal experts say that the most likely outcome is an out-of-court settlement - and that Judge Jackson's ruling on Friday gives Microsoft a strong incentive to seek such a solution.
Microsoft is the world's biggest company by market value, worth $470bn on the Nasdaq stock market.
Bill Gates has a personal fortune of more than $100bn. Since the trial began in October 1998, the company has gained over $200bn in value.
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