The Department of Justice (DOJ) and 20 states brought an antitrust lawsuit against Microsoft Corporation in 1998. The DOJ claimed Microsoft violated antitrust laws by selling its web software, Internet Explorer, with its Windows operating system. This made it very hard for other companies to sell their web browser software. Microsoft argued that Internet Explorer and Windows were essentially the same program and should be sold together.
The next year, the judge in the case found that Microsoft constituted a monopoly in the computer operating systems market. He further stated that the company was using its monopoly power to prevent technological innovation, and that this harmed consumers. Although the judge ruled that Microsoft would be divided into two parts, this was overturned on appeal.
In 2001, the DOJ said it would not try to break the company up, but rather use more lenient antitrust penalties. The DOJ demanded that Microsoft share part of its operating system technology with other software companies. Microsoft accepted the settlement in 2002, however, a number of the states that had joined the lawsuit felt that it was not a harsh enough punishment for the company’s antitrust practices.
In February 2004, the DOJ filed an antitrust lawsuit against the software firm, Oracle. The suit was filed after Oracle’s hostile bid to buy over a competing software firm, PeopleSoft. The DOJ stated that if Oracle successful bought PeopleSoft, it would greatly restrict competition in the development of software for human resources management and financial management services. Final arguments in the case were given in July 2004.
The Supreme Court recently limited the extent to which companies can be liable for anti-trust violations in other countries. The Court held that the Sherman Act, one of the major federal antitrust laws, does not allow foreign buyers to bring antitrust lawsuits in the U.S. for violations that happened in a foreign country.