United States v. Microsoft Corporation

Microsoft Corporation (Microsoft) (defendant) was a leading seller of operating-system software and related software products. Microsoft began a sales practice of bundling its web-browsing software, Internet Explorer, with its operating-system software, Windows 95 or 98. At the time, Microsoft enjoyed market power in the market for operating-system software but faced competition in the market for web-browsing software. The United States (plaintiff) brought a complaint against Microsoft, contending that Microsoft’s bundling practice was an unlawful tying arrangement. The district court held in favor of the government and found Microsoft’s bundling practice to constitute a per se violation of antitrust law. Immediately after the district court entered final judgment against Microsoft, interviews with the trial judge appeared in the press. The judge had apparently given secret interviews to reporters before entering the final judgment against Microsoft. The earliest interview was two months before the judge published his findings of fact. In the interviews, the judge expressed his impression of the testimony offered during trial, including the testimony of Bill Gates, whom the judge described as not credible. The judge also likened Microsoft’s conduct to drug traffickers and told reporters that he did not have to give Microsoft any due process. Four months before the final restructuring order, the judge told reporters that he was not comfortable restructuring Microsoft, because he did not know if he was competent to do so. The judge insisted that these interviews remain secret until after he issued the final judgment. Microsoft appealed the district court's judgment, arguing that the bundling practice should not have been subject to a per se analysis. Microsoft also argued on appeal that the judge had committed ethical violations by making comments to the press on the merits of the case.