Microsoft vs U.S. antitrust battle soon to be history

WASHINGTON Wed Apr 27, 2011 6:33pm EDT

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WASHINGTON (Reuters) - Thirteen years after the Justice Department filed an antitrust lawsuit against Microsoft, accusing the software giant of using its market power to pummel potential rivals, the case will soon be history.

"And so May 12 will close an important chapter in the history of antitrust law," said Judge Colleen Kollar-Kotelly during the last oversight hearing on Wednesday at the U.S. District Court for the District of Columbia.

The oversight will expire on May 12 with no further hearings.

The investigation of Microsoft began with the Federal Trade Commission, which also enforces antitrust law.

But it was soon shifted to the Justice Department which, backed by a number of states, filed suit in 1998 alleging Microsoft illegally used its dominance of the Windows operating system market to shut out rivals to its Internet Explorer.

Two years later, a district judge ruled in favor of the government.

But an appeals court overturned that ruling, and in 2001 the Justice Department reached a settlement with Microsoft, which critics saw as inappropriately weak. But it was approved, and the oversight required by the settlement ends next month.

"It is appropriate for the final judgment to be allowed to expire on May 12," said Adam Severt, speaking for the Justice Department on Wednesday.

Stephen Houck, who has been involved in the case for years, told the hearing that extreme market power grew quickly in the high-tech industry but that the Microsoft case proved that it was not immune to antitrust law.

"When we first brought the case, critics said it was impossible to bring an antitrust case against a high-tech, fast-moving industry," said Houck, appearing for a group of states led by California.

Microsoft changed as a company during the legal battle and subsequent court oversight, going from a politically naive company that brushed off regulators to one who played the Washington game.

Also during that time, the tech world changed almost entirely, said Marc Schildkraut, an antitrust attorney with the law firm Dewey and LeBoeuf.

"Obviously Microsoft still has has a very large share of the laptop/desktop operating system world," he said. "They're obviously trying to compete with Google, with Bing, but I don't think they're getting anywhere."

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