Meta Platforms:Regulatory Environment: Difference between revisions

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 <u>Verdict:</u>
-'''Microsoft lost the case against the government''', and the presiding judge, Thomas Penfield Jackson, ruled that the company violated multiple sections of the Sherman Antitrust Act. However, the trial was not a smooth one. The case was riddled with false and misleading statements, tampering with evidence, such as executive emails, and a plethora of courtroom distractions.
+'''Microsoft lost the case against the government, and the presiding judge, Thomas Penfield Jackson, ruled that the company violated multiple sections of the Sherman Antitrust Act'''. However, the trial was not a smooth one. The case was riddled with false and misleading statements, tampering with evidence, such as executive emails, and a plethora of courtroom distractions.
-Microsoft was formally charged with constituting a market monopoly by making it difficult for users to install competing software and simultaneously making it difficult to uninstall the company’s browser, Internet Explorer.
+Microsoft was formally charged with constituting a market monopoly by making it difficult for users to install competing software and simultaneously making it difficult to uninstall the company’s browser, Internet Explorer.<blockquote>On June 7, 2000, after an extremely short hearing, Judge Jackson issued his remedies decision, splitting Microsoft into two companies, and imposing severe business conduct restrictions. The plaintiffs remedies proposal as adopted by the Judge imposed a breakup of Microsoft into two pieces, an “operating systems” company which would inherit all the operating systems software, and an “applications” company with all the with all the remaining software assets. Cash and securities holdings of other companies held by Microsoft would be split between the resulting entities. Bill Gates and other officers / shareholders of the company would not be allowed to hold executive and ownership positions in both of the resulting companies.</blockquote><u>Court of Appeals Decision</u>
-The company argued that these practices were non-coercive and that consumers enjoyed the freedom of choice due to the presence of products such as Macintosh, Unix, etc. The government also found that the company, by stifling competition, threatened innovation in the software industry. '''The company was also forced to share its data with other third parties.'''
+'''Microsoft appealed''', and was granted a stay of all parts of the District Court decisions until the appeal is heard
-'''The government also ruled that the company should be divided into two, thus creating two separate entities. One would be solely for the Windows operating system, while the other entity would be responsible for all other software products offered by Microsoft. The ruling was challenged by Microsoft, and an appeals court overturned the ruling.'''
+The Washington DC Court of Appeals ruled on June 28, 2001 on the appeal by Microsoft of the District Court’s decision in the Microsoft antitrust case. The basic points of the Appeals Court decision are:
+# Microsoft’s breakup and other remedies imposed by the District Court are vacated.
+# Microsoft is found liable of monopolization of the operating systems market for PCs. 20
+# Microsoft is found not liable of bundling of Internet Explorer with Windows.
+# Microsoft is found not liable of attempting to monopolize the Internet browser market.
+# The district court judge Thomas Penfield Jackson is taken out of the case for improper behavior.
+# The case is remanded to the District Court for remedies determination for the monopolization charge.
+# The Appeals Court instructs the District Court to examine the bundling of IE and Windows (if plaintiffs bring it up) under “a rule of reason” where the consumer benefits of bundling are balanced against the damage of anti-competitive actions/
+<u>Final Settlement</u>
+On November 2, 2001, the United States and Microsoft proposed a settlement in the major antitrust case
+A. Provisions seen as favorable to Microsoft:
+# No breakup. There are no structural changes, such as a breakup of Microsoft.
+# Microsoft can expand the functions of Windows. Microsoft can add any functions it wants to the operating system. 3
+# No restrictions on bundling. There are no general restrictions imposed on product bundling by Microsoft.
+# No wide disclosure of source code. Mandated disclosures are limited to interfaces.
+B. Provisions seen as favorable to the plaintiffs:
+# '''Broad scope of definition of “middleware” products:''' The settlement defines “middleware” to include browser, e-mail clients, media players, instant messaging software, and future new middleware developments.
+# '''Requirement to partially disclose middleware interfaces:''' Microsoft will be required to provide software developers with the interfaces used by Microsoft’s middleware to interoperate with the operating system.
+# '''Requirement to partially disclose server protocols:''' The settlement imposes interoperability between Windows and non-Microsoft servers of the same level as between Windows and Microsoft servers.
+# '''Freedom to install middleware software:''' Computer manufacturers and consumers will be free to substitute competing middleware software on Microsoft’s operating system.
+# '''Ban on retaliation:''' Microsoft will be prohibited from retaliating against computer manufacturers or software developers for supporting or developing certain competing software.
+# '''Uniform pricing of Windows for same volume sale:''' Microsoft will be required to license its operating system to key computer manufacturers on uniform terms for five years. Microsoft will be allowed to provide quantity discounts.
+# '''Ban on exclusive agreements;contract restrictions:''' Microsoft will be prohibited from entering into agreements requiring the exclusive support or development of certain Microsoft software
+# '''Compliance and enforcement:''' A panel of three independent, on-site, full-time computer experts will help enforce the settlement. One panel member will be selected by Microsoft, one by the Justice Department, and one by both. The panel will have full access to all of Microsoft’s books, records, systems, and personnel, including source code, and will help resolve disputes about Microsoft’s compliance with the disclosure provisions of the settlement.
 === Scholars Assestment ===