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20 Security Essentials Practical Examination December 2001 00 SANS Institute -2 Carey C.2002 © SA NS In sti tu As part of GIAC practical repository.Antitrust Lawsuits . Basala 00 2. . Antitrust Lawsuits Against Microsoft for Monopolizing Computer Software Markets Au th or re tai ns f ull rig ht s. Author retains full rights.Microsoft 1 Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 te Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 © SANS Institute 2000 .
and web browser they use. The outcome of this lawsuit will most likely not affect the choices consumers make when they choose what operating system. . Internet Explorer. Au th or re tai ns f Is Microsoft a monopolist or an American success story? These are among the characterizations that swirl around the investigations of the antitrust violations against Microsoft. te 20 00 -2 00 2.Antitrust Lawsuits – Microsoft Abstract 2 Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 © SANS Institute 2000 . the question arises as to which browser to use to take full advantage of the Internet.2002 © SA NS In sti tu As part of GIAC practical repository. ull rig ht s. This question brought on 2 antitrust lawsuits against Microsoft Corporation because of their web browser. With the Internet becoming increasingly popular as a method of information retrieval and advertising. Author retains full rights. application software.
the US Federal Trade Commission began an investigation of Microsoft’s marketing practices.2002 © SA NS In sti tu As part of GIAC practical repository. Another voting effort in July again yielded a 2-2 tie. In 1980 the company purchased the rights to a software package called “Quick and Dirty Operating System” (QDOS). caused Microsoft to become the dominant producer of operating software. a formal commission vote on whether to seek a Preliminary injunction ended in a 2-2 deadlock.80 billion (White. 1995). MS-DOS accounted for 80% of all system software sold with PCs. © SANS Institute 2000 . At this time. DE3D F8B5 06E4 A169 4E46 close. On July 15. The sell of these operating systems contributed to the growth of Microsoft to become a company with annual sales of $3. In February 1993. te July15. In 1992. The success of the IBM PC containing the operating software MS-DOS.1 had been installed. These claims were the basis for the first antitrust investigation against Microsoft. but in June 1993. By mid-1993. 1995. Microsoft modified= QDOS meet IBM’s requirements and renamed it A169 MS-DOS (White. not including the litigation and court proceedings that would follow. This new complaint revived the interest of the US Federal Trade Commission and combined their efforts with the European Union’s Competition Directorate in the investigation of Microsoft (White. filed an antitrust complaint with the European Union’s Competition directorate against Microsoft. European Union’s Competition Directorate and Microsoft announced a jointFA27 agreement. 1995). Author retains full rights. the US Federal Trade Commission.Antitrust Lawsuits – Microsoft Antitrust Lawsuits Against Microsoft for Monopolizing Computer Software Markets Background 3 In June 1990. “a consent that brought the investigations to a Key fingerprint = AF19 2F94 998D FDB5decree”. These voting efforts almost stopped the investigation. Key fingerprint AF19 to FA27 2F94 998D FDB5 DE3D F8B5 06E4 4E46 ull rig ht s. Shortly after that acquisition. few people outside of the computer industry had heard of Microsoft. This case had a potential for continued litigation for an extended length of time. . no formal charges had been filed against Microsoft but the investigation had already consumer four years.. -2 00 2. 1995 – Signed consent Decree 20 00 The astounding success Microsoft experienced with its operating system caused rival producers to complain that Microsoft was trying to monopolize the software industry because of their pricing structure and contract agreements with PC makers.75 billion and assets of $3. IBM selected Microsoft to provide the operating system for the personal computers (PC) that IBM would launch in August 1981. Novell Inc. over 120 million copies of MSDOS had been installed on PCs and another 50 million copies of Microsoft’s new graphic user interface (GUI) operating system Windows 3. 1985). Au th or re tai ns f Before 1980.
(2) Microsoft’s testing agreements with application software developers would no longer preclude them from working with other operating system producers (ZDNN.Antitrust Lawsuits . such as Netscape Navigator. Microsoft was accused of anti-competitive marketing practices directed at personal computer manufacturers who preinstall operating system software on the personal computers they produce for retail sale. downloading and uploading files. one must first understand what a Web browser is? Microsoft Press (1997) defines a Web browser as: “Software that lets a view HTML and access fields and A169 software related to those Key fingerprint =user AF19 FA27 2F94documents 998D FDB5 DE3D F8B5 06E4 4E46 documents. such as Internet Explorer. this control decreased to 60%.Microsoft 4 Netscape versus Internet Explorer The rivalry between Internet Explorer and Netscape Navigator began when the release of Microsoft’s Windows 95 bundled with Internet Explorer was first announced. The Internet also provides businesses with free advertising by publishing their Web pages. are an addition to the operating system on a client computer. Following the first release of Internet Explorer. a Web browser is a user-friendly program that allows a user to view and transfer many different documents from many different places. and Web page designers are careful when developing pages. Author retains full rights. Microsoft agreed to the following: (1) It would rewrite it contracts so that PC makers would pay only for each copy of MS-DOS that was installed on the PCs shipped and Microsoft’s contracts would be no longer than one year. te 20 00 Before one can understand what the battle of the top Web browsers is about. such as Java applets or ActiveX controls included by programmers in the documents. Designers typically test their sites to ensure that all aspects of a Web page are visible to viewers using both Netscape Navigator and Internet Explorer browsers.” In simplest terms. Most Web browsers are also capable of downloading and transferring files. By signing the decree. are actually part of the operating system and support some system functions. Netscape Communications Corporation controlled more than 70% of the browser market. This © SANS Institute 2000 . Web browser software is built on the concept of hyperlinks. Advertising is an essential part of the Internet. This market share decrease made Netscape concerned about the release of Windows 95 bundled with Internet Explorer and prompted federal authorities to explore legal action. or the local hard drive. In sti tu As part of GIAC practical repository. Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 The claim against Microsoft and Internet Explorer. displaying graphics embedded in the document. In day-to-day business operations. -2 00 2. and executing small programs. which allow users to point and click with a mouse in order to jump from document to document in whatever order they desire. while others. In 1997.2002 © SA NS The Internet has become a personal necessity. an Intranet. providing access to newsgroups. and for search engines. 1997). Au th or re tai ns f ull rig ht s. and it has become an everyday source of information and advertising for businesses. Originally developed to allow users to view or browse documents on the World Wide Web (WWW). Web browsers are the essential tools that allow access to the resources that the Internet offers. Web browsers are used for e-mail. Web browser can blur the distinction between local and remote resources for the user by also providing access to documents on a network. . Some Web browsers.
(Netscape Communications Corporation charged a licensing fee to original equipment manufacturers for the use of Netscape Navigator.2002 © SA 1. Windows. This ruling pleased the executives at Netscape Communications Corporation. In May 1995. Microsoft required computer manufacturers to license and install its browser as a condition of licensing the existing Windows 95 operating system. Microsoft intends to use the same tie-in contracts to force manufacturers to accept its browser with Windows 98. US District Court Judge Thomas Penfield Jackson ruled that Microsoft must not require original equipment manufacturers to bundle Microsoft Internet Explorer with Windows 95. preventing them from giving more prominent display to a browser from one of Microsoft’s competitors. FA27 Judge Jackson further stated that his 06E4 rulingA169 would not cause Key fingerprint = AF19 2F94 998D FDB5 DE3D F8B5 4E46 Microsoft significant hardship nor prevent the promotion of Internet Explorer as a single product in the free market.) Author retains full rights. Microsoft proposed to Netscape that Netscape’s browser become the sole browser for those with non-Windows operating systems while Microsoft would supply the sole browser for computer operated by Windows. 1998. th or re tai ns f ull rig ht s. © SANS Institute 2000 . Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 4. US Versus Microsoft Au The ruling of the lawsuit. lawsuit was based on the argument that Internet Explorer and Windows 95 were two selfstanding products and that integrating them into one package gave Microsoft an unfair advantage over Netscape Communications Corporation. The government contends that Microsoft is violating the Sherman antitrust Act of 1890 by using its monopoly with Windows 95 to dominate the Internet browser market. Senior Vice President Lori Mirek stated “the ruling cleared the way for Netscape Communications Corporation to seek out computer makers to preinstall their browser” (Moeller. The suit sought to force Microsoft to offer Windows without the features of Internet Explorer or to include Netscape Navigator in its package (Encarta. Unfortunately for Netscape Communications Corporation. and Netscape rejected the non-competition proposal. Microsoft released Windows 98 and the Department of Justice and 20 State Attorney Generals and the District of Columbia filed another lawsuit that accused Microsoft of engaging in multiple anti-competitive acts. 2000_. Microsoft forces computer manufacturers to adopt a uniform first screen sequence of Microsoft’s design. . The Justice Department alleges the following illegal conduct by Microsoft: As part of GIAC practical repository.Antitrust Lawsuits . te 20 On May 18. The lawsuit further stated that this action by Microsoft violated the company’s consent decree of 1995. however. 1997). NS In sti tu The government’s case. 00 -2 00 2. is the operating system on 90 percent of the nation’s PCs.Microsoft 5 2. the US Circuit Court of Appeals overturned Judge Jackson’s ruling. 3.
Court of Appeals.2002 © SA NS In sti On June 20. The Justice Dept and 18 States that have the lawsuit against Microsoft have officially decided not to seek a breakup of Microsoft. Court of Appeals for the District of Columbia asked Microsoft to prepare to argue about the conduct and the interview comments made by Judge Jackson. 5. Judge Thomas Penfield Jackson sent Microsoft’s appeal to the Supreme Court trying to bypass the appeals courts and expedite a final verdict on whether Microsoft violated the Sherman Anti-Trust Act. Judge Jackson’s ruling on U. Judge Penfield Jackson of the United States District Court for the District of Columbia finds in U. It also seeks to eliminate the 998D ability of Internet service. On February 6. One of the biggest controversial statements that came under attack at the hearing was the comments made by Judge Jackson comparing Bill Gates to Napoleon and the Microsoft Company to a Murderous street gang. S.com/reports/dojvsms). Judge Jackson ordered Microsoft to be divided into two companies. Author retains full rights. 2000. 2000. Instead they are going © SANS Institute 2000 .Antitrust Lawsuits . District Judge Colleen Kollar-Kotelly is appointed to hear the remaining arguments in the Microsoft Anti-trust case. tu As part of GIAC practical repository.com/reports/dojvsms). 6. On September 26. . online service.policy. ull rig ht s. Microsoft used anti-competitive practices to create and maintain monopoly power. Court of Appeals for the District of Columbia. Au th or re tai ns f These allegations against Microsoft are to eliminate Microsoft’s licensing and marketing contracts that restrict the ability of computer manufacturers to choose which browser to install on their PCs. Because of these comments and the lack of defining the market that Microsoft was being accused of monopolizing.S. Microsoft tried to prove that Judge Jackson had a bias opinion and that his ruling should be reversed.S. on condition they do not reach agreements for on-click access on a competitor’s browser (http://www. Microsoft reached anti-competitive agreements with nearly the entire nation’s largest and most popular on-line server providers and Internet service require providers to offer Microsoft’s Internet Explorer as the exclusive or primary browser through which they distribute their services. Jackson finds. and Internet Key fingerprint = AF19 FA27 2F94 FDB5 DE3D F8B5 06E4 A169 4E46 content providers to distribute and promote competing browser software. 2000 the Supreme Court made its decision to not hear a direct appeal and sent the case back to the U.S. Microsoft has contracts with Internet content providers to give them on-click access on the Windows active desktop feature. te 20 00 -2 00 2. ordering that the trial not enter the phase in which penalties are assessed. versus Microsoft that Microsoft violated the Sherman Anti-Trust Act.comreports/dojvsms).S. 2001 the U.policy. Microsoft opposed forwarding the case directly to the Supreme Court and has currently won a victory from the appeals court by denying the government’s request to prevent Microsoft from filing an immediate appeal. on June 28.policy. 2001 the federal appeals court reversed Judge Jackson’s order to break up Microsoft and removed Judge Jackson from the case.S. (http://www.Microsoft 6 U. Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 U. 2000 (http://www. On April 3. versus Microsoft. about his ruling of the Microsoft Anti-trust case. On June 7. 2000. He also delayed his previous ruling that would have broken up the company and imposed strict conditions on Microsoft’s business practices beginning September 5.
the operating system software that 90 percent of the population uses could change.Antitrust Lawsuits .com/reports/dojvsms).com/ ac2/wp-dyn/A47104-2001Nov6). te 20 00 -2 Microsoft characterizes the antitrust case as part of an unfair pursuit of a company whose only crime is being too adept and successful as a computer software creator. tu As part of GIAC practical repository. 2001. Unfortunately. The states that are Key fingerprint = AF19 FA27 2F94 998D FDB5 by DE3D F8B5 A169 4E46 against the settlement will proceed with there anticompetitive lawsuit against Microsoft sometime in March 2002 (http://www. lacking competition. Author retains full rights. Au th or re Antitrust Settlement. . 00 2.2002 © SA NS In sti These cases are important to a profession that requires the use of computers or an individual who uses a computer. Judge Kollar-Kotelly trying to get this case settled quickly asked for a hiring on arguments of the settlement agreement. steadily increasing the features and functionality of its operating system products… A monopolist. 2001 but 9 states including the District of Columbia refused to accept the settlement agreement. would have no need for such a high level of investment in innovation” (http://www.Microsoft after Microsoft for violating the 1995 Consent decree between Microsoft and the government and Microsoft’s anticompetitive conduct. tai ns f ull rig ht s.washingtonpost. With a settlement agreement that restricts Microsoft from performing software development and software integration. The results could have a serious effect in the way software manufacturing companies develop application software and networking software. 7 Conclusion Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 © SANS Institute 2000 . The case now takes two directions. The Justice Department and 9 states will continue with the settlement proposal and the settlement agreement will be published in the Federal Register the end of 06E4 November. Microsoft thought that their long court battle would be diminished today November 6. The Antitrust case will continue making history with its long litigation that has expanded so far over 4 years.policy. On November 1. Microsoft said “it devotes enormous resources to innovation. the Justice Department and Microsoft agreed on a settlement but that the wording of the agreement had not been finalized and that the negotiations could still break down. there does not seem to be an end to this case in the near future.
2001. Microsoft. Computer and Internet Dictionary. Microsoft. White. Retrieved November 20. (1999).2002 © SA NS In sti tu As part of GIAC practical repository. A. (2001). DC. Seattle. 2001.washingtonpost. from http://www.html Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 Retrieved from The Encarta 2000 new World Timeline.com/zdnn/content/zdn/1211/161516.htm Anonymous (2001). from http://www. (1997). 3rd eds. Retrieved November 7. DOJ vs.gov/atr/cases/ms_index. . Retrieved November 7. Retrieved November 7. CD-ROM. VQ: Microsoft Author retains full rights. United States V. and Krim J.eff. 2001.usdoj.htm.com/ac2/wp-dyn/A47104-2001Nov6 Au th or re tai ns f ull rig ht s.com/library/weekly/aa010798. DC. from http://www. 2001. 2001. May 19). Retrieved November 8. Anonymous (1997). L. Was that the right outcome?.about. (1998. (2000).org/pub/lega l/Cases/DOJ_v_Microsoft Ludens. te 20 00 -2 00 2. Moeller. Washington. from http://windows.gov/atr/public/press_releases/1998 /1764. States Split on Microsoft Deal.zdnet. D. from http://usdoj.Antitrust Lawsuits – Microsoft References Press. Washington. Department of Justice. Excerpts from the judge’s decision. Justice Department files antitrust suit against Microsoft for unlawfully monopolizing computer software markets. from http://www. DC. M.htm Cha. 8 Key fingerprint = AF19 FA27 2F94 998D FDB5 DE3D F8B5 06E4 A169 4E46 © SANS Institute 2000 . (1995). The Justice Department and the software giant battled to a draw. Washington. Retrieved. November 8. 2000.
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