Plaintiffs. The United States Department of Justice plus the attorneys general of California, Connecticut, the District of Columbia, Florida, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New York, North Carolina, Ohio, South Carolina, Utah, West Virginia, and Wisconsin. Filed May 18, 1998 in the District of Columbia, before Judge Thomas Penfield Jackson. The state-AG action and the federal action were consolidated for trial.
Theory of liability. Sherman Act § 2 monopoly-maintenance: that Microsoft used its dominant position in Intel-compatible PC operating systems to suppress nascent competition from cross-platform middleware — Netscape Navigator and the Java runtime — by bundling Internet Explorer into Windows 95 and Windows 98 at zero marginal cost, signing exclusionary contracts with OEMs and ISPs, and using its OS distribution to disadvantage rival browsers. A parallel Sherman Act § 1 tying claim alleged Microsoft unlawfully tied IE to Windows.
Trial and findings. The bench trial ran October 1998 through June 1999. Bill Gates's videotaped deposition — portions of which were aired in court — was widely viewed as catastrophic for Microsoft's posture. Judge Jackson issued findings of fact on November 5, 1999 (Microsoft is a monopolist in PC operating systems and exercised that monopoly to harm consumers, competitors, and innovation) and conclusions of law on April 3, 2000 (Microsoft violated §§ 1 and 2 of the Sherman Act).
Breakup remedy and reversal. Final judgment was entered June 7, 2000, ordering Microsoft split into an operating-systems company and an applications company. The D.C. Circuit, sitting en banc, unanimously reversed the breakup remedy on June 28, 2001. The appeals court upheld the § 2 monopoly-maintenance findings but rejected the § 1 tying ruling under the per-se framework, remanded the tying claim for evaluation under the rule-of-reason, and removed Judge Jackson from the case for press contacts during the trial that compromised the appearance of impartiality. The case was reassigned to Judge Colleen Kollar-Kotelly.
Settlement. The Bush DOJ settled with Microsoft on November 2, 2001; nine states and the District of Columbia signed onto the settlement, while California, Connecticut, Florida, Iowa, Kansas, Massachusetts, Minnesota, Utah, and West Virginia held out and continued to seek stronger remedies. Judge Kollar-Kotelly approved the settlement and the parallel state-litigating-states' final judgment on November 1–12, 2002. The consent decree imposed conduct restrictions on Microsoft's OEM contracts, opened communications protocol licensing, and created a Technical Committee with on-site oversight authority.
Decree expiration. The consent decree was originally set to expire in 2007 but was extended in 2006 over Communications Protocol Program compliance failures. Final expiration came on May 12, 2011, ending nearly a decade of court-supervised oversight of Microsoft's contracting and protocol-disclosure conduct.
Why it matters. USA v. Microsoft remains the load-bearing American precedent for platform monopoly cases. It established that bundling can constitute exclusionary conduct under § 2; it set the template for the § 2 case the DOJ later brought against Google (and that Apple is now defending in US v. Apple); and it produced the warning that even a finding of liability does not produce a structural remedy if the appeals process trims aggressive trial-court orders. Every contemporary US tech antitrust case is being argued against this baseline.