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Ruling Against Microsoft

Bill Gates co-founded Microsoft Corp., a multibillion-dollar personal-computer software company, in 1975. It made him the world's richest man. Now his megacompany is in big trouble. Last Monday a federal court ruled that Microsoft broke the law by making a "deliberate assault" on its competitors that also make Internet browsers. Microsoft sold its Internet Explorer Web browser as part of its Windows operating system so that anyone who used Windows could easily use Explorer, but not another company's Web browser. The way Microsoft did that is illegal, U.S. District Judge Thomas Penfield Jackson declared.

"Microsoft placed an oppressive thumb on the scale of competitive fortune," wrote Jackson. Last November the judge declared Microsoft a monopoly. That means that Microsoft unfairly controlled the computer industry so that its products would be easiest for consumers to buy.

As a punishment, Jackson could break up Microsoft into a few smaller companies or order it to change its business practices. He could stop Microsoft from using high prices to punish clients that do business with competitors. He could force Microsoft to take its name off the first screen most people see when they turn on their computers. He could also order Microsoft to reveal the blueprint for its Windows computer-operating software, so that other companies can use this information.

Gates will fight the decision. He says Microsoft has been aggressive but not unfair, and that it has helped computer users: "Our software has helped make PCs accessible and more affordable to millions."

Many experts expect Microsoft to remain successful even if it's ordered to change its ways. "The probability of a breakup is less than 1%," wrote business analyst Neil J. Herman last Bill Gates heard all week.

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