immediate release -- February 22, 2000.
Contact Bob Brammer, 515-281-6699
of Iowa Attorney General Tom Miller on
Oral Arguments on Conclusions of Law
in the Microsoft Antitrust Case
Tuesday, February 22, 2000
The States today are
urging the Court to conclude that Microsoft has violated fundamental Federal
and State antitrust laws -- laws that must apply to Microsoft and the
software industry if competition, consumers and innovation are to be protected.
We argue for the premise
that no industry, no firm, and no individual is above the law. And we
argue from the facts already found by the Court that Microsoft has attempted
collusion and used exclusionary contracts, tying and predation in a coordinated,
illegal scheme to eliminate threats to its monopoly.
has caused enormous injury to consumers, especially in terms of lost consumer
choice, as the Court already has found. A finding of Microsoft liability
will send an unmistakable message that no firm will be permitted to exploit
monopoly power to impose its own dictates upon this industry at the expense
of consumers, innovation and competition.
Structure of the States'
and U.S. Argument
We argue that the
Court's Findings of Fact establish that Microsoft violated the Sherman
Act and comparable State laws in at least four ways:
First, and most comprehensively,
we urge the Court to conclude that Microsoft undertook a host of actions
that illegally maintained its monopoly in the market for personal computers.
That is a violation of Section 2 of the Sherman Act, which prohibits a
firm with monopoly power from maintaining that monopoly power through
means that go beyond competition on the merits. We have alleged - and
we urge the Court to conclude - that Microsoft has violated the law by
engaging in a series of anti-competitive, exclusionary, and predatory
acts to maintain its monopoly. As the Court's Findings of Fact stated,
these actions harmed consumers directly and indirectly, injured competition,
hobbled innovation, harmed many other businesses in the industry, and
lacked pro-competitive justification.
Second, we urge the
Court to conclude that Microsoft illegally tied its web browser to its
operating system, in violation of Section 1 of the Sherman Act and State
laws. The law prohibits tying arrangements in which agreements between
a defendant and its customers require the customers as a condition of
obtaining one product (the tying product, Microsoft's operating system)
also to take a second product (the tied product, Microsoft's Internet
Explorer browser.). The vice was not that Microsoft offered computer manufacturers
and users a bundled version of Windows and Internet Explorer; the vice
was that Microsoft did not give them the CHOICE of taking Windows without
the browser. Microsoft thus compelled those that wished otherwise to take
Internet Explorer to obtain Windows. We urge the Court to conclude those
facts constitute an antitrust violation of the Sherman Act.
Third, we ask the
Court to conclude that Microsoft also violated Section 1 of the Sherman
Act when it entered into a variety of illegally exclusionary agreements
with personal computer manufacturers, with Internet access and on-line
service providers, and with Internet content providers. The law prohibits
any agreement that constitutes an "unreasonable restraint on competition."
Consistent with the Court's Findings of Fact, we urge the Court to conclude
that the restrictive effect of numerous Microsoft agreements was not reasonably
necessary to achieve legitimate pro-competitive objectives such as serving
consumers though lower costs and improving products.
Fourth, we ask the
Court to conclude that Microsoft violated Section 2 of the Sherman Act
by its unlawful attempt to monopolize the browser market. The Act prohibits
attempts to monopolize. The Supreme Court has determined that a defendant
violates the prohibition if "the defendant has engaged in predatory
or anti-competitive conduct, with a specific intent to monopolize, and
a dangerous probability of achieving monopoly power." The Court's
Findings of Fact establish each element of this offense of attempted monopolization
of the browser market.
In sum, today we ask
the Court to apply its Findings of Fact and conclude as a matter of law
that Microsoft has violated both Section 2 and Section 1 of the Sherman
And, finally, we urge
the Court to proceed to consideration of appropriate remedies. The Court's
Findings of Fact powerfully enumerate the consequences of Microsoft's
illegal actions - direct and indirect harm to consumers, distortion of
competition, hobbled and stifled innovation, reduced consumer choice,
harm to competing firms, deterred investment in promising new technology.
We are coming closer to addressing those consequences and determining
Today marks another
milestone as we move one big step closer to resolution of this landmark
case. Given the enormity of the issues and the typical time consumed by
most complex antitrust cases, this case has moved forward with remarkable
speed and progress. We look forward to the Judge's Conclusions of Law.
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