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New York v. Microsoft Corp.

Document Cited authorities 35 Cited in 46 Precedent Map Related
Decision Date01 November 2002
Docket NumberNo. CIV. A. 98-1233 CKK.,CIV. A. 98-1233 CKK.
Citation224 F.Supp.2d 76
PartiesState of NEW YORK, et al., Plaintiffs v. MICROSOFT CORPORATION, Defendant.
CourtU.S. District Court — District of Columbia

224 F.Supp.2d 76

State of NEW YORK, et al., Plaintiffs v. MICROSOFT CORPORATION, Defendant.

No. CIV. A. 98-1233 CKK.

United States District Court, District of Columbia.

November 1, 2002.

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Steven F. Benz, Kellogg, Huber, Hansen, Todd, & Evans, PLLC, Washington, DC, for California Plaintiffs.

Jay Ward Brown, Levine Sullivan & Koch, LLP, Washington, DC, for Cable News Network, LP, LLP, Dow Jones & Co., Inc., Los Angeles Times, The Associated Press, The Washington Post, USA Today, Bloomberg News, The New York Times Co.

Bret A. Campbell, Clifford Chance Rogers & Wells LLP, Washington, DC, for Sun Microsystems, Inc.

Ellen S. Cooper, Office of the US Attorney General, Baltimore, MD, for Commonwealth of Ky., State of Ariz., State of Ark., State of Colo., State of Idaho, State of Ill., State of Ind., State of La., State of Maine, State of Md., State of Mich., State of Miss., State of Mo., State of Nev., State of N.H., State of N.J., State of N.D., State of Ohio, State of Ore., State of S.D., State of Tenn., State of Vt., State of Wash., State of Wis.

Douglas Lee Davis, Office of Attorney General State of West Virginia, Charleston, WV, for State of W.Va Jonathan Donnellan, Cable News Network, LP, LLLP, Atlanta, GA, for Cable News Network, LP, LLP.

Mark E. Faris, Gannett Co., Inc., McLean, VA, Barbara W. Wall, Gannett Co., Inc., McLean, VA, for USA Today.

Donald L. Flexner, Boies, Schiller & Flexner LLP, Washington, DC, for SBC Communications, Inc.

John G. Froemming, Howrey Simon Arnold & White, LLP, Washington, DC, for Gateway, Inc.

Karlene Goller, Los Angeles, CA, for Los Angeles Times.

Robert Gutkin, Pillsbury Winthrop LLP, Washington, DC, Aileen Meyer, Washington, DC, for San Jose Mercury News, Inc.

Jay L. Himes, New York Department of Law, New York, NY, for Commonwealth of Ky., State of Ill., State of La., State of Md., State of Mich., State of N.Y., State of N.C., State of Ohio, State of Wis.

John L. Warden, Sullivan & Cromwell, New York, NY, Richard J. Uroksky, Sullivan & Cromwell, New York, NY, Steven L. Holley, Sullivan & Cromwell, New York, NY, Bradley Paul Smith, Sullivan & Cromwell, Washington, DC, William H. Neukom, Microsoft Corporation, Redmond, WA, for Microsoft Corp.

Thomas J. Horton, Orrick, Herrington & Sutcliffe LLP, Washington, DC, for Onyx Software Corp.

Stuart D. Karle, Dow Jones & Co., Inc., New York, NY, for Dow Jones & Co., Inc.

Steven R. Kuney, Williams & Connolly, Washington, DC, for Commonwealth of Ky., Commonwealth of Mass., Dist. of Col., State of Cal., State of Conn., State of Fla., State of Ill., State of Iowa, State of Kan., State of La., State of Md., State of Mich., State of Minn., State of N.Y., State of N.C., State of Ohio, State of Utah, State of Wis., State of W.Va.

Alan R. Kusinitz, New York State Attorney General's Office, Antitrust Bureau, New York, NY, Kevin J. O'Connor, Office of the Attorney General Of Wisconsin, Madison, WI, Richard L. Schwartz, New York Attorney General's Office, Antitrust Bureau, New York, NY, for Commonwealth of Ky., Commonwealth of Mass., Dist. of Col., State of Cal., State of Conn., State of Fla., State of Ill., State of Iowa, State of Kan., State of La., State of Md., State of Mich., State of Minn., State of N.M., State of N.Y., State of N.C., State of Ohio, State of S.C., State of Utah, State of W.Va., State of Wis.

Lee Levine, Levine Sullivan & Koch, LLP, Washington, DC, for Bloomberg News, Cable News Network, LP, LLP, Dow Jones & Co., Inc., Los Angeles Times, The Associated Press, The New York Times Co., The Washington Post, USA Today.

Eric Lieberman, Washington, DC, Mary Ann Werner, Washington, DC, for The Washington Post.

Peter Peckarsky, Washington, DC, for Relpromaz Antitrust Inc.

Gene C. Schaerr, Sidley Austin Brown & Wood LLP, Washington, DC, for The Association for Competitive Technology.

David A. Schulz, Clifford Chance Rogers & Wells LLP, New York, NY, for The Associated Press.

Brendan V. Sullivan, Jr., Williams & Connolly LLP, Washington, DC, for Commonwealth of Ky., Commonwealth of Mass., Dist. of Col., State of Cal., State of Conn., State of Fla., State of Ill., State of Iowa, State of Kan., State of La., State of Md., State of Mich., State of Minn., State of N.C., State of Ohio, State of Utah, State of Wis.

MEMORANDUM OPINION

"There is a remedy for all things but death ...."1

KOLLAR-KOTELLY, District Judge. 

                TABLE OF CONTENTS
                INTRODUCTION ...............................................................86
                  I. PROCEDURAL HISTORY ......................................................86
                 II. LAW OF THE CASE .........................................................88
                     A. Court of Appeals Opinion ............................................89
                        1.   Market Definition ..............................................89
                        2.   Theory of Liability ............................................89
                        3.   Four-Part Test for Liability ...................................90
                        4.   Original Equipment Manufacturer ("OEM") Licenses ...............91
                        5.   Integration of Internet Explorer ("IE") and Windows ............92
                        6.   Agreements with Internet Access Providers ("IAPs") .............92
                        7.   Agreements with Internet Content Providers ("ICPs"), Independent
                               Software Vendors ("ISVs"), and Apple .........................93
                        8.   Java ...........................................................94
                        9.   Intel ..........................................................95
                        10.  Vacating the District Court's Order of Remedy ..................95
                        11.  Remand .........................................................97
                     B. District Court's Findings of Fact and Surviving Conclusions of Law...97
                     C. General Antitrust Law of Remedies ...................................99
                III. SCOPE OF THE REMEDY ...................................................103
                     A. Legal Authority Related to Scope of the Remedy .....................106
                     B. Findings of Fact Related to Scope of the Remedy ....................110
                        1.  Introduction ...................................................110
                        2.  Treatment of Middleware ........................................112
                            a. "Middleware" and Related Definitions in Microsoft's
                                Proposal ...................................................112
                                i. "Non-Microsoft Middleware" in the SRPFJ .................113
                               ii. "Non-Microsoft Middleware Product" in the SRPFJ .........114
                              iii. "Microsoft Middleware Product" in the SRPFJ .............115
                               iv. "Microsoft Middleware" in the SRPFJ .....................116
                            b. "Middleware" and Related Definitions in Plaintiffs'
                                Proposal ...................................................117
                                i. "Middleware" in the SPR .................................118
                                ii. "Microsoft Middleware Product" in the SPR ..............119
                        3.  New Technologies ...............................................121
                            a. Server/Network Computing ....................................121
                            b. Set-Top Boxes and Interactive Television Software ...........124
                            c. Handheld Devices ............................................125
                            d. Web Services ................................................126
                     C. Conclusions Regarding Scope of the Remedy ..........................128
                        1.  Server/Network Computing .......................................129
                        2.  Set-Top Boxes and Interactive Television Software ..............130
                        3.  Handheld Devices ...............................................131
                        4.  Web Services ...................................................133
                        5.  Middleware .....................................................135
                     D. Alleged "Bad" Acts by Microsoft ....................................138
                
                1.   Findings of Fact-Allegedly New "Bad" Acts Relating to
                               Interoperation ..............................................139
                             a. Kerberos ...................................................139
                             b. CIFS .......................................................140
                             c. Directory Services, LDAP, ADSI .............................141
                             d. TDS ........................................................142
                             e. MAPI .......................................................142
                             f. MUP ........................................................142
                        2.   Old "Bad" Acts Relating to Interoperation .....................143
                        3.   Conclusions Regarding "Bad" Acts Evidence .....................144
                             a. Insufficient Nexus to Java Developer Tools Deception .......144
                             b. Insufficient Nexus to First Wave Agreements ................145
                             c. Nexus to Old "Bad" Acts ....................................146
                     E. Causation Analysis .................................................147
                        1.   Microsoft's Simple Injunction Argument ........................147
                        2.   Economic Testimony ............................................148
                             a. Dr. Shapiro's Causation Analysis ...........................149
                                 i. Factual Findings .......................................149
                                ii. Conclusions ............................................150
                             b. Dr. Murphy's Causation Analysis ............................151
                                 i. Factual Findings .......................................151
                                ii. Conclusions ............................................151
                                    
                 IV. REMEDY-SPECIFIC CONCLUSIONS ............................................151
                     A.
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