The following is a list of all parties, intervenors and amici who appeared in the United States District Court for the District of Columbia, and all persons who are parties or amici in this Court.

Microsoft Corporation (Defendant-Appellant), United States of America (Plaintiff-Appellee), State of New York (Plaintiff-Appellee), State of California (Plaintiff-Appellee), State of Connecticut (Plaintiff-Appellee), District of Columbia (Plaintiff-Appellee), State of Florida (Plaintiff-Appellee), State of Illinois (Plaintiff-Appellee), State of Iowa (Plaintiff-Appellee), State of Kansas (Plaintiff-Appellee), State of Kentucky (Plaintiff-Appellee), State of Louisiana (Plaintiff-Appellee), State of Maryland (Plaintiff-Appellee), Commonwealth of Massachusetts (Plaintiff-Appellee), State of Michigan (Plaintiff-Appellee), State of Minnesota (Plaintiff-Appellee), State of New Mexico (Plaintiff-Appellee), State of North Carolina (Plaintiff-Appellee), State of Ohio (Plaintiff-Appellee), State of Utah (Plaintiff-Appellee), State of West Virginia (Plaintiff-Appellee) and State of Wisconsin (Plaintiff-Appellee).

The State of South Carolina was a plaintiff in the district court but withdrew from the case during trial. It is not a party in this Court.

Pursuant to Rule 26.1 of the Federal Rules of Appellate Procedure and D.C. Circuit Rule 26.1, Microsoft Corporation ("Microsoft") certifies that it has no corporate parents and that no publicly-held company owns 10% or more of Microsoft’s stock.

The following persons were permitted to intervene in the district court for limited purposes: Bloomberg News, Bristol Technology, Inc., The New York Times Co., Reuters America, Inc., San Jose Mercury News, Inc., The Seattle Times, ZDNET and ZDTV, L.L.C.

The following persons were permitted to participate as amici curiae in the district court: Association for Competitive Technology, Robert H. Bork, the Computer & Communications Industry Association, Lawrence Lessig, Robert E. Litan and the Software and Information Industry Association.

By Order dated November 3, 2000, this Court granted the following persons permission to participate as amici curiae in this Court: America Online, Inc., Association for Competitive Technology, the Center for the Moral Defense of Capitalism, the Computer & Communications Industry Association, the Computing Technology Industry Association, the Project to Promote Competition & Innovation in the Digital Age, the Software and Information Industry Association, the Association for Objective Law, Lee A. Hollaar, Carl Lundgren and Laura Bennett Peterson.

The rulings under review are (i) the Final Judgment entered by the district court (Hon. Thomas Penfield Jackson) on June 7, 2000, and (ii) the Order entered by the district court on April 3, 2000 (save the portion of the Order dismissing the DOJ’s first claim for relief and the States’ fifth claim for relief). The Final Judgment is reported as United States v. Microsoft Corp., 97 F. Supp. 2d 59 (D.D.C. 2000). The April 3, 2000 Order, which accompanies the district court’s conclusions of law, is reported as United States v. Microsoft Corp., 87 F. Supp. 2d 30 (D.D.C. 2000).

The district court’s findings of fact are reported as United States v. Microsoft Corp., 84 F. Supp. 2d 9 (D.D.C. 1999). The district court’s summary judgment decision is reported as United States v. Microsoft Corp., 1998-2 Trade Cas. (CCH) ¶ 72,261 (D.D.C. Sept. 14, 1998).

This case was previously before this Court as Nos. 98-5399 and 98-5400, which were consolidated on appeal. On August 10, 1998, various media organizations sought permission to attend pre-trial depositions pursuant to the Publicity in Taking Evidence Act of 1913, 15 U.S.C. § 30. The district court granted their motion on August 11, 1998. On January 29, 1999, this Court affirmed the district court’s decision. This Court’s decision is reported as United States v. Microsoft Corp., 165 F.3d 952 (D.C. Cir. 1999).

A closely related case was previously before this Court as No. 97-5343. On October 20, 1997, the DOJ filed a petition seeking to hold Microsoft in civil contempt for violating a consent decree entered on August 21, 1995. On December 11, 1997, the district court declined to hold Microsoft in contempt, but entered a sua sponte preliminary injunction and referred the merits of the DOJ’s claims to a special master. United States v. Microsoft Corp., 980 F. Supp. 537 (D.D.C. 1997). On June 23, 1998, this Court reversed the district court’s injunction and issued a writ of mandamus vacating the reference to a special master. This Court’s decision is reported as United States v. Microsoft Corp., 147 F.3d 935 (D.C. Cir. 1998).

A related case was previously before the United States Court of Appeals for the First Circuit as No. 98-2133. On September 18, 1998, Microsoft subpoenaed the notes and other research materials collected by Professors Michael A. Cusumano and David B. Yoffie, who wrote a book entitled Competing on Internet Time: Lessons from Netscape and the Battle with Microsoft. On October 1, 1998, Microsoft filed a motion to compel the production of those materials in the United States District Court for the District of Massachusetts. That motion was denied. On December 15, 1998, the First Circuit affirmed the denial of Microsoft’s motion on the ground that the requested materials were immune from discovery under a so-called "academic research" privilege. That decision is reported as Cusumano v. Microsoft Corp., 162 F.3d 708 (1st Cir. 1998).

No other related cases are pending in this Court or any other court.

CERTIFICATE AS TO PARTIES, RULINGS AND RELATED CASES i

A. Parties, Intervenors and Amici Curiae i

1. Parties i

2. Intervenors ii

3. Amici Curiae ii

B. Rulings under Review ii

C. Related Cases iii

TABLE OF CONTENTS v

TABLE OF AUTHORITIES xi

GLOSSARY xx

LIST OF WITNESSES AND DEPONENTS REFERRED TO IN THE BRIEF xxxiv

JURISDICTION 1

STATEMENT OF THE ISSUES 1

STATEMENT OF THE CASE 2

A. The Claims 3

B. Pretrial Proceedings 5

C. The Rulings Below 6

Tying 7

Exclusive Dealing 7

Monopoly Maintenance 8

Attempted Monopolization 8

D. The Final Judgment 9

STATEMENT OF FACTS 11

A. Microsoft and the Computer Industry 12

1. Operating System Software 13

2. Rapid Technological Change and Inflection Points 16

3. The Software Business 18

4. Microsoft’s Successful Business Model 19

B. The Decision To Support the Internet in Windows 20

C. Early Discussions Between Microsoft and Netscape 25

D. Microsoft’s Vigorous Competition with Netscape 29

1. Developing Improved Versions of IE 30

IE 3 30

IE 4 31

2. Encouraging Third Parties To Use and Distribute IE 32

ISPs 32

AOL and Other OLSs 35

Intuit and Other ISVs 38

ICPs 39

3. Integrating IE More Deeply into Windows 41

Internet Support for ISVs 42

Windows 98 User Interface 43

Windows 98 Help System 44

Windows Update 44

E. Plaintiffs’ Flawed Lawsuit 45

1. Netscape’s Distribution of Vast Quantities of Navigator 45

2. This Court’s June 1998 Decision 48

3. AOL’s Acquisition of Netscape and Strategic Alliance with Sun 51

F. The Dramatic Expansion of the Case 52

1. Sun 52

J/Direct 53

Remote Method Invocation 54

Visual J++ 6.0 54

First Wave Agreements 55

Intel’s Support of Java 55

2. Intel 55

3. Apple 57

QuickTime 58

The August 1997 Agreements 59

4. RealNetworks 61

5. IBM 62

SUMMARY OF ARGUMENT 64

ARGUMENT 68

I. Microsoft’s Design of Windows Is Not an Unlawful Tie 69

A. Windows Is a Single Product 69

1. The District Court Erred by Refusing To Follow Circuit Precedent 70

2. This Court Articulated the Correct Test for Evaluating Whether Windows and IE Are Separate Products 71

3. Windows and IE Are Not Separate Products under This Court’s Test 74

a. There Are Clear Benefits to Microsoft’s Integrated Design 74

b. The Benefits Cannot Be Duplicated by Combining an Operating System with a Standalone Web Browser 76

B. The Alleged Tie Did Not Foreclose Competition on the Merits in the "Browser" Market 80

No Forced Purchase of a Second Product 80

No Incompatibilities 82

No Distribution Foreclosure 83

II. Microsoft Did Not Maintain a Monopoly Through Anticompetitive Conduct 83

A. Microsoft Does Not Possess "Monopoly Power" in a Properly Defined Product Market 84

1. The Relevant Product Market Is Not Restricted to "Intel-Compatible PC Operating Systems" 84

a. The District Court’s Market Definition Excludes the Most Serious Competitive Threats to Windows 85

b. The District Court’s Market Definition Excludes Other Potential Substitutes for Windows 87

2. Microsoft Cannot Control Prices or Exclude Competition 88

a. Microsoft Does Not Behave Like a Monopolist 89

b. Market Share Is Not Determinative of Monopoly Power 92

c. There Are No Significant Barriers to Entry 93

B. Microsoft Did Not Engage in Anticompetitive Conduct 97

1. The Inclusion of Internet Technologies in Windows Did Not Violate Section 2 101

2. The Challenged Provisions of Microsoft’s OEM License Agreements Did Not Violate Section 2 102

a. Microsoft’s OEM License Agreements Simply Restate Its Rights under Federal Copyright Law 103

b. Microsoft’s OEM License Agreements Did Not Foreclose Netscape’s Distribution of Navigator 107

3. Microsoft’s Agreements with IAPs Did Not Violate Section 2 109

4. Microsoft’s Development and Marketing of Its Own Java Implementation Did Not Violate Section 2 111

5. Microsoft’s Conduct Taken as a Whole Did Not Violate Section 2 112

C. No Causal Link Was Shown between the Allegedly Anticompetitive Acts and the Maintenance of a Purported Monopoly 115

III. Microsoft Did Not Attempt To Monopolize the Alleged "Browser" Market 118

A. Microsoft Did Not Engage in Anticompetitive Conduct 118

B. Microsoft Did Not Act with a Specific Intent To Monopolize the Alleged "Browser" Market 119

C. There Is No Dangerous Probability of Monopolization 121

1. Microsoft’s June 1995 Discussions with Netscape Did Not Create a Dangerous Probability of Monopolization 122

2. AOL Controls Over One-Third of IE’s Usage Share 123

IV. The District Court’s Extreme Relief Is Unsustainable 125

A. The District Court Improperly Entered a Sweeping Decree without a Hearing 125

B. The Breakup of Microsoft Is Unwarranted as a Matter of Law 128

1. The Breakup Is Unjustified Absent a Significant Causal Connection between Microsoft’s Conduct and Market Position 129

2. The Breakup Extends Far Beyond What Is Necessary To Redress the Conduct Found To Be Anticompetitive 130

3. The Breakup Is Unwarranted Because the Challenged Conduct Could Reasonably Have Been Thought Permissible 132

4. The Breakup Would Jeopardize Important Public Benefits 133

5. The Breakup Would Create Enormous Practical Problems Not Considered by the District Court 133

C. The Other Extreme Relief Entered by the District Court Is Punitive and Not Justified by the Antitrust Violations Found 134

1. The Decree Would Require Microsoft To Disclose Proprietary Information about Its Operating Systems to Its Competitors 135

2. The Decree Would Interfere with the Design of Microsoft’s Operating Systems 137

V. The District Court Committed Reversible Error in Its Handling of the Case 141

A. The District Court Failed To Provide Microsoft with Adequate Opportunity To Prepare for and Defend against a Dramatically Expanded Case 142

B. The District Court Created a Procedural Framework in Which Reliance on Hearsay Was Inevitable 144

VI. The District Judge’s Public Comments Concerning the Merits of the Case Require That the Judgment Be Vacated and the Case Reassigned to Another Judge 146

CONCLUSION 150

(Authorities on which Microsoft chiefly relies are marked with asterisks.)

A.A. Poultry Farms, Inc. v. Rose Acre Farms, Inc.,
881 F.2d 1396 (7th Cir. 1989), cert. denied, 494 U.S. 1019 (1990) 100

Abcor Corp. v. AM Int’l, Inc., 916 F.2d 924 (4th Cir. 1990) 99-100, 120

AD/SAT v. Associated Press, 181 F.3d 216 (2d Cir. 1999) 86, 122

Advanced Computer Servs. of Mich., Inc. v. MAI Sys. Corp.,
845 F. Supp. 356 (E.D. Va. 1994) 106

Advanced Health-Care Servs., Inc. v. Radford Cmty. Hosp.,
910 F.2d 139 (4th Cir. 1990) 116

Alaska Airlines, Inc. v. United Airlines, Inc.,
948 F.2d 536 (9th Cir. 1991), cert. denied, 503 U.S. 977 (1992) 116

* Ass’n for Intercollegiate Athletics for Women v. NCAA,
735 F.2d 577 (D.C. Cir. 1984) 100, 115, 120

Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887 (10th Cir. 1991) 124

* Ball Mem’l Hosp., Inc. v. Mut. Hosp. Ins., Inc.,
784 F.2d 1325 (7th Cir. 1986) 84, 91, 92, 93, 94, 116

Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98 (3d Cir. 1992) 124

* Barry Wright Corp. v. ITT Grinnell Corp., 724 F.2d 227 (1st Cir 1983) 100, 110

Berkey Photo, Inc. v. Eastman Kodak Co.,
603 F.2d 263 (2d Cir. 1979), cert. denied, 444 U.S. 1093 (1980) 116, 119

BMI v. CBS, 441 U.S. 1 (1979) 106

Brooke Group, Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993) 99

Calif. Computer Prods., Inc. v. IBM, 613 F.2d 727 (9th Cir. 1979) 101

Cardinal Films, Inc. v. Republic Pictures Corp., 148 F. Supp. 156 (S.D.N.Y. 1957) 106

Charlton v. Estate of Charlton, 841 F.2d 988 (9th Cir. 1988) 125

Chicago Prof’l Sports Ltd. P’ship v. NBA, 961 F.2d 667 (7th Cir. 1992) 142

Cinderella Career & Finishing Sch., Inc. v. FTC, 425 F.2d 583 (D.C. Cir. 1970) 149

City of Groton v. Conn. Light & Power Co., 662 F.2d 921 (2d Cir. 1981) 113

Cmty. for Creative Non-Violence v. Reid,
846 F.2d 1485 (D.C. Cir. 1988), aff’d, 490 U.S. 730 (1989) 105

Concord Boat Co. v. Brunswick Corp.,
207 F.3d 1039 (8th Cir.), cert. denied,
69 U.S.L.W. 3176 (U.S. Nov. 6, 2000) (No. 00-379) 109, 125

Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962) 112-13

Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752 (1984) 97-98

Corsearch, Inc. v. Thomson & Thomson, 792 F. Supp. 305 (S.D.N.Y. 1992) 104

Costello Publ’g Co. v. Rotelle, 670 F.2d 1035 (D.C. Cir. 1981) 104

Cusumano v. Microsoft Corp., 162 F.3d 708 (1st Cir. 1998) iv

Data Gen. Corp. v. Grumman Sys. Support Corp.,
761 F. Supp. 185 (D. Mass. 1991), aff’d, 36 F.3d 1147 (1st Cir. 1994) 119

David L. Aldridge Co. v. Microsoft Corp., 995 F. Supp. 728 (S.D. Tex. 1998) 119

Dial A Car, Inc. v. Transp., Inc., 82 F.3d 484 (D.C. Cir. 1996) 124

Digital Equip. Corp. v. Uniq Digital Techs., Inc., 73 F.3d 756 (7th Cir. 1996) 82

Directory Sales Mgmt. Corp. v. Ohio Bell Tel. Co., 833 F.2d 606 (6th Cir. 1987) 81

Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (1992) 7

Ford Motor Co. v. United States, 405 U.S. 562 (1972) 128

Foremost Pro Color, Inc. v. Eastman Kodak Co.,
703 F.2d 534 (9th Cir. 1983), cert. denied, 465 U.S. 1038 (1984) 101, 115

Fortner Enters., Inc. v. U.S. Steel Corp., 394 U.S. 495 (1969) 69

Foster v. Md. State Sav. & Loan Ass’n, 590 F.2d 928 (D.C. Cir. 1978),
cert. denied, 439 U.S. 1071 (1979) 69

Fox Film Corp. v. Doyal, 286 U.S. 123 (1932) 103

* Gilliam v. ABC, 538 F.2d 14 (2d Cir. 1976) 104

Grappone, Inc. v. Subaru of New England, Inc., 858 F.2d 792 (1st Cir. 1988) 80

Great Escape, Inc. v. Union City Body Co., 791 F.2d 532 (7th Cir. 1986) 120

* ILC Peripherals Leasing Corp. v. IBM, 458 F. Supp. 423 (N.D. Cal. 1978),
aff’d sub nom. Memorex Corp. v. IBM, 636 F.2d 1188 (9th Cir. 1980),
cert. denied, 452 U.S. 972 (1981) 101

* ILC Peripherals Leasing Corp. v. IBM, 448 F. Supp. 228 (N.D. Cal. 1978),
aff’d sub nom. Memorex Corp. v. IBM, 636 F.2d 1188 (9th Cir. 1980),
cert. denied, 452 U.S. 972 (1981) 73-74, 82

In re Barry, 946 F.2d 913 (D.C. Cir. 1991) 147, 148, 150

In re Charge of Judicial Misconduct, 47 F.3d 399 (10th Cir. Jud. Council 1995) 148

In re Fine Paper Antitrust Litig., 685 F.2d 810 (3d Cir. 1982) 113

* In re IBM Peripheral EDP Devices Antitrust Litig.,
481 F. Supp. 965 (N.D. Cal. 1979), aff’d sub nom.
Transamerica Computer Co. v. IBM, 698 F.2d 1377 (9th Cir.),
cert. denied, 464 U.S. 955 (1983) 82, 94, 101, 124

In re IBM, 45 F.3d 641 (2d Cir. 1995) 147

In re Indep. Serv. Orgs. Antitrust Litig.,
203 F.3d 1322 (Fed. Cir.), petition for cert. filed,
69 U.S.L.W. 3087 (July 11, 2000) (No. 00-62) 103, 106, 107

* Ind. Grocery, Inc. v. Super Valu Stores, Inc., 864 F.2d 1409 (7th Cir. 1989) 92, 124

Info. Res., Inc. v. A.C. Nielsen Co., 615 F. Supp. 125 (N.D. Ill. 1984) 73

Int’l Data Processing, Inc. v. IBM, 585 F. Supp. 1470 (D.N.J. 1984) 73

Interface Group, Inc. v. Mass. Port Auth., 816 F.2d 9 (1st Cir. 1987) 98

* Intergraph Corp. v. Intel Corp., 195 F.3d 1346 (Fed. Cir. 1999) 98, 103, 113, 116, 119

Jack Walters & Sons Corp. v. Morton Bldg., Inc.,
737 F.2d 698 (7th Cir.), cert. denied, 469 U.S. 1018 (1984) 72

Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (1984) 7, 72, 75-75, 80, 81

Liljeberg v. Health Servs. Acquisition Corp., 486 U.S. 847 (1988) 148

Los Angeles Land Co. v. Brunswick Corp.,
6 F.3d 1422 (9th Cir. 1993), cert. denied, 510 U.S. 1197 (1994) 92, 94

LucasArts Entm’t Co. v. Humongous Entm’t Co.,
870 F. Supp. 285 (N.D. Cal. 1993) 104, 106

Madsen v. Women’s Health Ctr., Inc., 512 U.S. 753 (1994) 128

MCI v. AT&T, 708 F.2d 1081 (7th Cir.), cert. denied, 464 U.S. 891 (1983) 100

Montgomery County Ass’n of Realtors, Inc. v. Realty Photo Master Corp.,
878 F. Supp. 804 (D. Md. 1995), aff’d, 91 F.3d 132 (4th Cir. 1996) 106

Multistate Legal Studies, Inc. v. Harcourt Brace
Jovanovich Legal & Prof’l Publ’ns, Inc.,
63 F.3d 1540 (10th Cir. 1995), cert. denied, 516 U.S. 1044 (1996) 80-81

Nat’l Bank of Commerce v. Shaklee Corp., 503 F. Supp. 533 (W.D. Tex. 1980) 105

NCAA v. Bd. of Regents of Univ. of Okla., 468 U.S. 85 (1984) 112

Northeastern Tel. Co. v. AT&T, 651 F.2d 76 (2d Cir. 1981),
cert. denied, 455 U.S. 943 (1982) 116

N. Pac. Ry. Co. v. United States, 356 U.S. 1 (1958) 69, 76

Northwestern Nat’l Cas. Co. v. Global Moving & Storage, Inc.,
533 F.2d 320 (6th Cir. 1976) 144

Ocean State Physicians Health Plan, Inc. v. Blue Cross & Blue Shield,
883 F.2d 1101 (1st Cir. 1989), cert. denied, 494 U.S. 1027 (1990) 100, 116

Olympia Equip. Leasing Co. v. W. Union Tel. Co.,
797 F.2d 370 (7th Cir. 1986), cert. denied, 480 U.S. 934 (1987) 115-16

Omega Envtl., Inc. v. Gilbarco, Inc., 127 F.3d 1157 (9th Cir. 1997),
cert. denied, 525 U.S. 812 (1998) 110

Paddock Publ’ns, Inc. v. Chicago Tribune Co.,
103 F.3d 42 (7th Cir. 1996), cert. denied, 520 U.S. 1265 (1997) 111

PSI Repair Servs., Inc. v. Honeywell, Inc., 104 F.3d 811 (6th Cir. 1997) 115

Response of Carolina, Inc. v. Leasco Response, Inc.,
537 F.2d 1307 (5th Cir. 1976) 71, 101

Rothery Storage & Van Co. v. Atlas Van Lines, Inc.,
792 F.2d 210 (D.C. Cir. 1986), cert. denied, 479 U.S. 1033 (1987) 87

Roy B. Taylor Sales, Inc. v. Hollymatic Corp., 28 F.3d 1379 (5th Cir. 1994) 83

S. Pac. Communications Co. v. AT&T, 556 F. Supp. 825 (D.D.C. 1982), aff’d,
740 F.2d 980 (D.C. Cir. 1984), cert. denied, 470 U.S. 1005 (1985) 113

S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir. 1989) 104

SCM Corp. v. Xerox Corp., 645 F.2d 1195 (2d Cir. 1981),
cert. denied, 455 U.S. 1016 (1982) 106

Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555 (11th Cir. 1991) 111

Simpson v. United Oil Co. of Cal., 377 U.S. 13 (1964) 106

* Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993) passim

Standard Oil Co. v. United States, 221 U.S. 1 (1911) 89

Stenograph L.L.C. v. Bossard Assocs., Inc., 144 F.3d 96 (D.C. Cir. 1998) 103

* Telex Corp. v. IBM, 367 F. Supp. 258 (N.D. Okla. 1973), rev’d on other grounds,
510 F.2d 894 (10th Cir.), cert. dismissed, 423 U.S. 802 (1975) 72, 73, 82

Texaco, Inc. v. FTC, 336 F.2d 754 (D.C. Cir. 1964),
vacated on other grounds, 381 U.S. 739 (1965) 149

Thurman Indus., Inc. v. Pay’N Pak Stores, Inc., 875 F.2d 1369 (9th Cir. 1989) 86-87

Times-Picayune Publ’g Co. v. United States, 345 U.S. 594 (1953) 80

Timken Roller Bearing Co. v. United States, 341 U.S. 593 (1951) 130

Tops Mkts., Inc. v. Quality Mkts., Inc., 142 F.3d 90 (2d Cir. 1990) 91, 92, 93

Town of Concord v. Boston Edison Co., 915 F.2d 17 (1st Cir. 1990),
cert. denied, 499 U.S. 931 (1991) 99

Trace X Chem., Inc. v. Canadian Indus., Ltd., 738 F.2d 261 (8th Cir. 1984) 97, 102

U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d 986 (11th Cir. 1993),
cert. denied, 512 U.S. 1221 (1994) 123-24

U.S. Healthcare, Inc. v. Healthsource, Inc., 986 F.2d 589 (1st Cir. 1993) 110

United States ex rel. Modern Elec., Inc. v. Ideal Elec. Sec. Co.,
81 F.3d 240 (D.C. Cir. 1996) 68

United States v. ALCOA, 148 F.2d 416 (2d Cir. 1945) 121

United States v. ALCOA, 91 F. Supp. 333 (S.D.N.Y. 1950) 128, 133

United States v. American Airlines, Inc., 743 F.2d 1114 (5th Cir. 1984),
cert. dismissed, 474 U.S. 1001 (1985) 122

United States v. Baker Hughes Inc., 908 F.2d 981 (D.C. Cir. 1990) 93

* United States v. Cooley, 1 F.3d 985 (10th Cir. 1993) 149

United States v. E.I. du Pont de Nemours & Co., 366 U.S. 316 (1961) 134

United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377 (1956) 84, 86, 87

United States v. Eastman Kodak Co., 853 F. Supp. 1454 (W.D.N.Y. 1994) 89

United States v. Empire Gas Corp., 537 F.2d 296 (8th Cir. 1976),
cert. denied, 429 U.S. 1122 (1977) 124

United States v. GE, 115 F. Supp. 835 (D.N.J. 1953) 128

United States v. Grinnell Corp., 236 F. Supp. 244 (D.R.I. 1964),
aff’d, 384 U.S. 563 (1966) 88-89

United States v. Grinnell Corp., 384 U.S. 563 (1966) 83-84

United States v. Haldeman, 559 F.2d 31 (D.C. Cir. 1976),
cert. denied, 431 U.S. 933 (1977) 147

United States v. Lemire, 720 F.2d 1327 (D.C. Cir. 1983),
cert. denied, 467 U.S. 1226 (1984) 144

United States v. Microsoft Corp., 165 F.3d 952 (D.C. Cir. 1999) iii

* United States v. Microsoft Corp., 147 F.3d 935 (D.C. Cir. 1998) passim

United States v. Microsoft Corp., 56 F.3d 1448 (D.C. Cir. 1995) 148, 150

United States v. Microsoft Corp., 97 F. Supp. 2d 59 (D.D.C. 2000) passim

United States v. Microsoft Corp., 87 F. Supp. 2d 30 (D.D.C. 2000) passim

United States v. Microsoft Corp.,
1999-2 Trade Cas. (CCH) ¶ 72,737 (D.D.C. Dec. 20, 1999) 74

United States v. Microsoft Corp., 84 F. Supp. 2d 9 (D.D.C. 1999) passim

United States v. Microsoft Corp.,
1998-2 Trade Cas. (CCH) ¶ 72,261 (D.D.C. Sept. 14, 1998) iii, 5, 50, 70, 141

United States v. Microsoft Corp., 980 F. Supp. 537 (D.D.C. 1997) iii, xxi, 49

United States v. Microsoft Corp.,
1995-2 Trade Cas. (CCH) ¶ 71,096 (D.D.C. Aug. 21, 1995) xxi, 48

* United States v. Nat’l Lead Co., 332 U.S. 319 (1947) 130-31, 134

United States v. Nat’l Lead Co., 63 F. Supp. 513 (S.D.N.Y. 1945),
aff’d, 332 U.S. 319 (1947) 130

United States v. Or. State Med. Soc’y, 343 U.S. 326 (1952) 134

United States v. Studiengesellschaft Kohle, m.b.H, 670 F.2d 1122 (D.C. Cir. 1981) 106

* United States v. Syufy Enters., 903 F.2d 659 (9th Cir. 1990) 88, 89, 92, 94

United States v. Torres, 115 F.3d 1033 (D.C. Cir. 1997) 71

United States v. U.S. Gypsum Co., 340 U.S. 76 (1950) 125, 132

United States v. U.S. Gypsum Co., 333 U.S. 364 (1948) 68

United States v. United Shoe Mach. Corp.,
110 F. Supp. 295 (D. Mass. 1953), aff’d, 347 U.S. 521 (1954) 132, 133

United States v. United Shoe Mach. Co., 247 U.S. 32 (1918) 130

United States v. Westinghouse Elec. Corp., 648 F.2d 642 (9th Cir. 1981) 106

W. Parcel Express v. UPS, 190 F.3d 974 (9th Cir. 1999) 109-10

Washington Post v. Robinson, 935 F.2d 282 (D.C. Cir. 1991) 147

Weinstein v. Univ. of Ill., 811 F.2d 1091 (7th Cir. 1987) 105

Wesson Foods, Inc. v. Ragu Foods, Inc.,
627 F.2d 919 (9th Cir. 1980), cert. denied, 450 U.S. 921 (1981) 92

* WGN Cont’l Broad. Co. v. United Video, Inc., 693 F.2d 622 (7th Cir. 1982) 104-05

15 U.S.C. § 4 1

15 U.S.C. § 30 iii

17 U.S.C. § 106 105

17 U.S.C. § 410 103

28 U.S.C. § 455 147, 149

28 U.S.C. § 1291 1

28 U.S.C. § 1331 1

28 U.S.C. § 1337 1

28 U.S.C. § 1367 1

Code of Conduct for United States Judges,
175 F.R.D. 363 (1998) 147, 150

37 C.F.R. § 202.20 137

Fed. R. App. P. 26.1 i

Fed. R. Civ. P. 52 68

D.C. Cir. R. 26.1 i

ABA Panel Includes Microsoft Judge, N.Y.L.J., Aug. 10, 1999, at 2 142

Phillip E. Areeda et al., Antitrust Law (1996) passim

Robert H. Bork, The Antitrust Paradox (1978) 118

Mark Boslet, AOL Plan for Netscape Browser May Impact Microsoft Case,
Dow Jones News Service, Apr. 5, 2000 52

Joel Brinkley & Steve Lohr, U.S. v. Microsoft (2000) passim

Joel Brinkley & Steve Lohr, Retracing the Missteps in the Microsoft Defense,
N.Y Times, June 9, 2000, at C8 3, 11, 146

Franklin M. Fisher et al., Folded, Spindled, and Mutilated:
Economic Analysis and U.S. v. IBM (1983) 99

James V. Grimaldi, Microsoft Judge Says Ruling at Risk,
Wash. Post, Sept. 29, 2000, at E1 147, 148

Thomas W. Hazlett, Microsoft’s Internet Exploration,
9 Cornell J.L. & Pub. Pol’y 29 (1999) 64-65

Sarah Jackson-Han, Father in Law,
Dartmouth Alumni Mag., Nov./Dec. 2000, at 44 150

Frances Katz, Netscape 6 Is Designed to Adapt to Non-PC Uses,
Chicago Trib., Apr. 10, 2000, at 11 52

Peter Loftus, AOL’s Case Wants Netscape Browser as
Default on Service, Dow Jones News Service, Apr. 5, 2000 52

Steve Lohr, U.S. v. Microsoft: The Case, N.Y. Times, May 19, 1998, at A1 2-3

Microsoft Judge Says He May Step Down from Case on Appeal,
Wall St. J., Oct. 30, 2000, at B4 146, 147

3 Melville B. Nimmer & David Nimmer,
Nimmer on Copyright (1999) 104

William H. Page & John E. Lopatka,
The Dubious Search for "Integration" in the Microsoft Trial,
31 Conn. L. Rev. 1251 (1999) 81

II William F. Patry, Copyright Law and Practice (1994) 105

Richard A. Posner, Antitrust Law, an Economic Perspective (1976) 129

Alison Schmauch, Microsoft Judge Shares His Experiences,
The Dartmouth, Oct. 3, 2000, at 1 146

J. Gregory Sidak, Debunking Predatory Innovation, 83 Colum. L. Rev. 1121 (1983) 101

Peter Spiegel, Microsoft Judge Defends Post-Trial Comments,
Fin. Times, Oct. 6, 2000, at 4 146, 148

US DOJ & FTC, Guidelines for Collaborations Among Competitors,
4 Trade Reg. Rep. (CCH) ¶ 13,161 (Apr. 7, 2000) 118-19

John R. Wilke, For Antitrust Judge, Trust, or Lack of It, Really Was the Issue,
Wall St. J., June 8, 2000, at A8 11

"Acer" Acer Inc. Acer is an OEM based in Taipei, Taiwan.

"ActiveX controls" Small software components that can be downloaded automatically from a server and executed in Web browsing software on a client. ActiveX controls can be used to access a wide range of Windows operating system functionality.

"AIX" IBM’s variant of the UNIX operating system designed to run on IBM’s workstations and servers.

"AOL" America Online, Inc. AOL is the world’s largest OLS by a substantial margin and is now the owner of Netscape and its Navigator Web browsing software.

"AOL’s proprietary client software" Software distributed by AOL to current and prospective subscribers, allowing them to access both AOL’s proprietary content and the Internet. The current version of AOL’s proprietary client software is built on the IE components of Windows.

"APIs" Application Programming Interfaces. APIs are interfaces exposed by an operating system or other platform software that can be invoked by other software to obtain a wide range of system services, such as displaying text on the video monitor or saving a document to the hard disk.

"Apple" Apple Computer, Inc. Apple manufactures the Macintosh line of computers and develops and markets the Mac OS operating system that runs on those computers. Apple’s Claris subsidiary develops and markets applications for the Mac OS in competition with Microsoft and other third parties.

"Be" Be Inc. Be develops and markets the BeOS operating system.

"BeOS" The operating system distributed by Be.

"Beta test version" A version of a software product provided to numerous third parties to enable them to test the product in a wide variety of real-world situations prior to the product’s commercial release. Beta testers agree to use software products still under development and to provide bug reports and other feedback to the developer. Beta testing typically follows extensive internal tests referred to as alpha testing.

"Caldera" Caldera Systems, Inc. Caldera distributes a version of the Linux operating system with various added features.

"CBS SportsLine" A sports Web site published by SportsLine.com, Inc. CBS SportsLine was one of the 24 ICPs that participated in Microsoft’s now-discontinued Channel Bar.

"Channel Bar" A feature of Windows that allowed users automatically to download information from specified Web sites at preset times. The downloaded information was cached to the hard disk so that it could be viewed at a later time.

"Chicago" Code name for Windows 95 during its development.

"Client" The "client" element of a client/server architecture. Typically, a client is a PC, workstation or non-PC device, such as a handheld computer.

"Compaq" Compaq Computer Corp. Compaq is an OEM based in Houston, Texas.

"CompuServe" CompuServe Interactive Services. CompuServe is an OLS and is now a wholly-owned subsidiary of AOL.

"Consent Decree" Final judgment entered in United States v. Microsoft Corp., Civil Action No. 94-1564 on August 21, 1995 and reported at 1995-2 Trade Cas. (CCH) ¶ 71,096 (D.D.C. Aug. 21, 1995).

"Consent Decree Case" Civil contempt proceeding brought against Microsoft by the DOJ on October 20, 1997 for alleged violations of the Consent Decree. Although the district court declined to hold Microsoft in contempt, it entered a sua sponte preliminary injunction requiring Microsoft to offer Windows 95 to OEMs without the IE components of the operating system. United States v. Microsoft Corp., 980 F. Supp. 537, 545 (D.D.C. 1997). On June 23, 1998, this Court reversed the district court’s preliminary injunction. United States v. Microsoft Corp., 147 F.3d 935, 956 (D.C. Cir. 1998).

"DEC" Digital Equipment Corp. DEC was a leading manufacturer of minicomputers and other computer hardware. DEC was acquired by Compaq in 1998.

"Dell" Dell Computer Corp. Dell is an OEM based in Austin, Texas.

"DirectX" The multimedia subsystem of Windows operating systems. DirectX enables users to view multimedia content on their computers using the Windows Media Player. The system services provided by DirectX are also exposed via APIs to third-party applications running on Windows.

"Disney" The Walt Disney Co. Disney’s Web site was one of the 24 ICPs that participated in Microsoft’s now-discontinued Channel Bar.

"DOJ" Antitrust Division of the U.S. Department of Justice.

"Dynamic HTML" Extensions to HTML that permit the creation of Web pages that change over time or react to input from the user without having to be refreshed from the server.

"EarthLink" EarthLink, Inc. EarthLink is an ISP and was one of the ten participants in the Windows 95 Referral Server program.

"Encompass" A Web browser "shell" developed by Encompass, Inc. that relies on system services supplied by the IE components of Windows. Encompass, Inc. was acquired by Yahoo! Inc. on May 27, 1999.

"Excel" Excel is a spreadsheet application developed and marketed by Microsoft. Excel is part of the Office suite of business productivity applications.

"FF" Findings of fact issued by the district court on November 5, 1999 and reported at 84 F. Supp. 2d 9 (D.D.C. 1999).

"First Wave Agreements" Agreements that Microsoft entered into with various ISVs during the development of Windows 98 and Windows NT 5.0 (later renamed Windows 2000) to encourage them to use the innovative features and functionality of these new operating systems in their products.

"Fujitsu" Fujitsu Ltd. Fujitsu is an OEM based in Tokyo, Japan.

"Gateway" Gateway, Inc. Gateway is an OEM based in North Sioux City, South Dakota.

"Hewlett-Packard" Hewlett-Packard Co. Hewlett-Packard is an OEM based in Palo Alto, California.

"Hitachi" Hitachi, Ltd. Hitachi is an OEM based in Tokyo, Japan.

"HTML" HyperText Mark-up Language. HTML is most commonly known as the language used to create documents on the World Wide Web. HTML is a tag-based language that specifies the attributes and layout of text, graphics and other elements of a Web page. Given its flexibility in displaying information, HTML is increasingly used for the user interfaces of operating systems and applications.

"HTTP" HyperText Transfer Protocol. HTTP is a networking protocol used for transmitting data (text, graphics, sound, video, etc.) over the Internet. HTTP is now also commonly used to transmit data within enterprises over corporate intranets.

"IAPs" Internet Access Providers. Plaintiffs use the term IAPs to refer collectively to both ISPs and OLSs.

"IBM" International Business Machines Corp. IBM is a leading supplier of a broad range of computer hardware and software based in Armonk, New York. IBM is, among other things, an OEM.

"ICPs" Internet Content Providers. ICPs are entities that provide content and applications to users of the Internet by maintaining Web sites.

"ICW" Internet Connection Wizard. The ICW is a feature introduced in OSR 2.0 of Windows 95 to provide users with step-by-step assistance in establishing a connection to the Internet through an ISP.

"IE" The Internet Explorer components of Windows operating systems.

"IEAK" Internet Explorer Administration Kit. The IEAK is a software tool developed by Microsoft that enables ISPs and corporate users to customize IE to meet their particular needs.

"IHVs" Independent Hardware Vendors. IHVs are entities engaged in developing and marketing computer hardware products such as printers, scanners and video monitors.

"InBox Direct" A feature that Netscape added to its Navigator Web browsing software that enables users to register with various ICPs and receive daily postings from those ICPs that are delivered directly to the user’s e-mail inbox.

"Initial Windows startup sequence" The sequence of screens that appear when a PC with Windows installed on it is "booted up" for the very first time.

"Intel" Intel Corp. Intel is the world’s leading designer and manufacturer of microprocessors used in PCs.

"Internet" The world’s largest computer network, consisting of millions of different computers ranging from mainframes to handheld devices. These diverse computers use TCP/IP to interoperate with one another. At the heart of the Internet is a backbone of high-speed data communication lines among major host computers. There are thousands of these host computers—commercial, governmental, educational, etc.—that route data and messages to one another.

"Intuit" Intuit Inc. Intuit is an ISV and the developer of the popular Quicken financial management software. Intuit also was one of the 24 participants in Microsoft’s now-discontinued Channel Bar.

"ISPs" Internet Service Providers. ISPs provide their subscribers with a connection to the Internet via telephone, cable or satellite, typically in exchange for a monthly fee.

"ISVs" Independent Software Vendors. ISVs are entities engaged in developing and marketing software products, including applications, tools and utilities.

"J/Direct" A native interface developed by Microsoft and made available to ISVs as part of Visual J++ 6.0. J/Direct enables ISVs writing Java programs for Windows to make calls directly to Windows APIs from Java programs running in Microsoft’s Java Virtual Machine.

"Java" The term Java applies to three separate but related concepts: (i) a high-level programming language developed by Sun, (ii) a set of class libraries that provide services to Java programs, and (iii) a runtime called a Java Virtual Machine that executes Java programs. The Java programming language is an object-oriented variant of the C++ programming language that has been simplified to eliminate features like memory pointers that cause common programming errors.

"JavaOS" An operating system developed jointly by Sun and IBM.

"JNI" Java Native Interface. A native interface developed by Sun to enable ISVs writing Java programs to make calls directly to APIs exposed by the underlying operating system.

"JVM" Java Virtual Machine. Software that converts programs written in the Java programming language into intermediate instructions called Java bytecodes and then executes those instructions. JVMs are included with popular operating systems from vendors like Apple, Hewlett-Packard, IBM, Microsoft and Novell.

"Linux" An operating system whose kernel was created in 1991 by Linus Torvalds, a Finnish graduate student, and subsequently expanded and improved on a cooperative basis by software developers around the world.

"Mac OS" Apple’s operating system for Macintosh computers.

"Microsoft" Microsoft Corporation.

"Mosaic" Web browsing software developed at the National Center for Supercomputing Applications at the University of Illinois and licensed by Microsoft from Spyglass, Inc.

"MS-DOS" Microsoft Disk Operating System. Released in 1981, MS-DOS was Microsoft’s first operating system. MS-DOS had a character-based user interface that required users to type specific instructions at a command prompt to perform tasks. Along with CP/M and UCSD P-System, MS-DOS was one of three operating systems made available to purchasers of the first IBM PC.

"MSHTML.DLL" The IE component of Windows that enables the operating system to "parse" and "render" information written in HTML so that it can be displayed on the screen. Through published APIs, this system service allows any ISV to embed into its products the ability to display HTML.

"MVS" Multiple Virtual Storage. MVS is an operating system designed by IBM for use with its mainframe computers, later expanded and renamed OS/390. MVS is capable of managing very large amounts of memory and hard disk space.

"My Computer" An icon on the Windows desktop that enables a user to open a browsing window that may be used to access files stored "locally" on floppy diskettes, CD-ROM drives and the hard drive built into a computer, or "remotely" on "local area networks," "wide area networks" and the Internet.

"Navigator" Web browsing software developed by Netscape. Netscape and Navigator are now owned by AOL.

"NeoPlanet" A Web browser "shell" developed by NeoPlanet, Inc. that relies on Internet-related system services supplied by the IE components of Windows.

"Netcaster" Netcaster was Netscape’s response to Microsoft’s Channel Bar. Netcaster was another implementation of push technology that delivers specified Internet content to a user’s computer on a periodic basis. As with the Channel Bar, the user could view content downloaded by Netcaster even when the user was not connected to the Internet.

"Netcom" Netcom On-Line Communication Services Inc. Netcom was an ISP and one of the ten participants in the Windows 95 Referral Server program. In February 1999, Netcom was acquired by MindSpring Enterprises Inc. MindSpring and EarthLink merged in February 2000.

"Netscape" Netscape Communications Corp. A company co-founded by Marc Andreessen and Jim Clark that developed the first commercially successful Web browsing software. Netscape is now owned by AOL.

"Novell" Novell, Inc. Novell develops and markets the IntranetWare and NetWare 5.0 server operating systems that are used in networks with various client operating systems, including Windows 95 and Windows 98.

"NSP" Native Signal Processing. NSP is the name Intel gave to a group of software products designed to consume additional microprocessor cycles and thereby spur demand for more advanced Intel products. NSP narrowly refers to the ability of Intel microprocessors to process certain digital signals internally rather than through the use of an external device known as a digital signal processor or DSP. As originally designed by Intel in 1995, NSP software was incompatible with both Windows 95 and Windows NT.

"O’Hare" Code name for IE during the development of Windows 95.

"Oblix" Oblix, Inc. Oblix is an ISV that develops Internet management software.

"OEMs" Original Equipment Manufacturers. OEMs are manufacturers or assemblers of personal computers.

"Office" Microsoft Office is a suite of business productivity applications developed by Microsoft that includes, among other things, Microsoft Excel spreadsheet software and Microsoft Word word processing software.

"OLSs" Online Services. OLSs provide their subscribers with a connection to the Internet as well as proprietary content and services like e-mail and personal Web pages.

"OLS folder" A folder that appears on the Windows desktop of Windows 95 and Windows 98. The OLS folder contains icons for the proprietary client software of several OLSs, including AOL. Clicking on one of these icons initiates the process of signing up for the OLS’s service.

"OpenServer" An operating system distributed by SCO.

"OS/2" An operating system originally released in 1987 with both client and server versions that ran on Intel microprocessors. Jointly developed by Microsoft and IBM, OS/2 was intended to replace MS-DOS as a more robust platform for running business applications. IBM and Microsoft terminated their joint development agreement in the early 1990s, and IBM developed later versions of OS/2 on its own.

"OSR" OEM Service Release. OSRs are interim releases of Windows made available to OEMs to provide them with the latest improvements to the operating system between major operating system releases.

"Packard Bell/NEC" Packard Bell NEC, Inc. Packard Bell/NEC was an OEM based in Woodland Hills, California. Packard Bell/NEC is no longer selling PCs in the United States.

"PC" Personal Computer.

"PC-DOS" Personal Computer Disk Operating System. PC-DOS is a character-based operating system distributed by IBM. Because IBM had a source code license to MS-DOS from Microsoft pursuant to the companies’ joint development agreement, PC-DOS is essentially a replica of MS-DOS.

"Portal Web site" A large Web site that offers an array of content and services, such as search engines, Web-based e-mail and calendars, photo sharing and online shopping. Yahoo.com and Netcenter (Netscape.com) are examples of portal Web sites.

"Quicken" Financial management software developed by Intuit.

"QuickTime" The multimedia subsystem of the Mac OS that Apple later ported to Windows and other operating systems. QuickTime can be used to create, edit, publish and play back multimedia content. Unlike DirectX, QuickTime for Windows does not expose multimedia-related system services to third-party applications running on Windows.

"RBOCs" The Regional Bell Operating Companies (e.g., Ameritech, Bell Atlantic, BellSouth, Pacific Bell and Southwestern Bell) as they existed at the time of trial.

"RealNetworks" RealNetworks, Inc. RealNetworks develops streaming media playback software, which enables users to send and receive audio, video and other multimedia content across the Web and begin viewing that content before the file containing that content has been fully downloaded.

"Red Hat" Red Hat, Inc. Red Hat distributes a version of the Linux operating system with various added features.

"RMI" Remote Method Invocation. A technology developed by Sun that permits different programs written in Java to share computing tasks, either on the same computer or across a network.

"RNA" Remote Network Access. Functionality included in Windows 95 that provided a method for PCs to connect to remote computers via a modem and a telephone line. The IE components of Windows used this RNA functionality to communicate with certain types of ISPs. At the request of Netscape and other vendors of Web browsing software, Microsoft exposed the RNA functionality through a series of published APIs.

"SCO" The Santa Cruz Operation, Inc. SCO developed and marketed the UnixWare and OpenServer operating systems. SCO recently entered into an agreement to sell those two operating systems to Caldera.

"Scripting tool" A piece of software used to create a list of commands to the operating system, called a script, that can be executed without any intervention by the user.

"Server" A server is a computer on a network that provides particular resources to clients, such as access to files and printers. For example, a file server is a computer on which users can store files. Web sites are hosted on servers.

"SHDOCVW.DLL" The IE component of Windows that enables the operating system to provide basic functionality associated with browsing, such as "Back" and "Forward" buttons and a list of "Favorite" information sources. This component supplies the user interface elements of various browsing windows displayed in Windows 98 (such as "Internet Explorer" and "Windows Explorer"). It also generates the customizable Start menu on the Windows desktop. Through published APIs, this system service allows any ISV to embed into its products basic functionality associated with browsing.

"SmartSuite" A suite of business productivity applications developed and marketed by IBM that includes, among other things, Lotus 1-2-3 spreadsheet software.

"Solaris" A variant of UNIX developed and marketed by Sun. Sun has versions of Solaris for SPARC, Intel and PowerPC microprocessors.

"Sony" Sony Electronics Inc. Sony is an OEM based in Tokyo, Japan.

"Spyglass" Spyglass Inc. Spyglass held the legal rights to the Mosaic Web browsing software developed at the National Center for Supercomputing Applications at the University of Illinois. Microsoft licensed Mosaic from Spyglass in 1994.

"States" The states that filed suit against Microsoft on May 18, 1998: California, Connecticut, Florida, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, New York, North Carolina, Ohio, South Carolina, Utah, West Virginia, Wisconsin and the District of Columbia. South Carolina withdrew from the action during trial.

"Sun" Sun Microsystems, Inc. Sun develops and markets (i) proprietary SPARC microprocessors, (ii) a wide range of computer hardware (including workstations and servers); (iii) operating systems (including Solaris and JavaOS), and (iv) middleware and applications (from its iPlanet joint venture with AOL). Sun supplies customers with a tightly integrated set of components that are designed, developed and tested to work well together.

"System Service" Functionality supplied by an operating system or other platform software that is made available through APIs for use by third-party applications.

"Surf Monkey" A Web browser "shell" for young children developed by SurfMonkey.com, Inc. that relies on Internet-related system services supplied by the IE components of Windows.

"TCP/IP" Transmission Control Protocol/Internet Protocol. TCP/IP is the suite of networking protocols used to connect computers together on the Internet. TCP/IP support is built into all modern operating systems—including Windows and UNIX variants—making it the de facto standard for transmitting data over networks. Even network operating systems that utilize their own proprietary protocols, such as Novell’s NetWare, also support TCP/IP.

"Toshiba" Toshiba Corp. Toshiba is an OEM based in Tokyo, Japan.

"UNIX" A multiuser, multitasking operating system originally created at AT&T’s Bell Laboratories for use on minicomputers. UNIX can be used on a variety of different microprocessors, including Sun’s SPARC microprocessors. There are numerous variants of UNIX developed for particular hardware platforms. Leading UNIX variants include Sun’s Solaris, IBM’s AIX, Hewlett-Packard’s HP-UX, Compaq’s Tru64 UNIX, and SCO’s OpenServer and UnixWare.

"UnixWare" An operating system developed and marketed by SCO.

"URLMON.DLL" The IE component of Windows that enables the operating system to locate information on the Internet or a corporate intranet using URLs. Through published APIs, this system service allows any ISV to embed into its products the ability to locate information on the Internet or a corporate intranet using URLs.

"URLs" Uniform Resource Locators. URLs are addresses used to locate information on the Internet or a corporate intranet, similar to a file location on a local hard drive. URLs can refer to static Web pages as well as to applications (scripts). URLs are made up of a protocol type, a hostname and an optional pathname. http://www.microsoft.com is a URL that uses HTTP to access Microsoft’s Web site.

"Visual J++ 6.0" Software development tools created by Microsoft that assist ISVs in writing software programs in the Java programming language. These tools can be used to write either Windows-specific Java applications or cross-platform Java applications.

"WebView" A Windows 98 feature that provides users with a richer view of locally-stored files, enabling them, for example, to see a "thumbnail" preview of a digital photograph or the first page of a PowerPoint slide presentation or an Excel spreadsheet by highlighting the name of the file.

"Windows" A diverse family of operating systems developed by Microsoft, including Windows 3.0, Windows 3.1, Windows for Workgroups 3.1, Windows 95, Windows 98, Windows Millennium, Windows NT Workstation and Windows NT Server (versions 3.1, 3.51 and 4.0), Windows 2000 Professional and Windows 2000 Server, and Windows CE. Windows operating systems provide a graphical user interface that permits users to perform tasks by clicking icons on the screen using a mouse or other pointing device.

"Windows 2000 Professional" A new client operating system developed by Microsoft that was commercially released in February 2000. Windows 2000 Professional is built on Windows NT technology and is targeted primarily at business customers.

"Windows 2000 Server" A new server operating system developed by Microsoft that was commercially released in February 2000. Windows 2000 Server is the successor to Microsoft’s Windows NT Server 4.0 operating system. More advanced versions of the operating system are Windows 2000 Advanced Server and the upcoming Windows 2000 Datacenter Server.

"Windows 3.0" A client operating system developed by Microsoft that was commercially released in May 1990. Windows 3.0 was the first commercially successful version of Windows.

"Windows 95" A client operating system developed by Microsoft that was commercially released in August 1995. Windows 95 incorporated the functionality of MS-DOS and Windows 3.1 in a 32-bit operating system with a range of new features and functionality. Windows 95 was updated with various interim releases, called OSRs, that were provided by Microsoft to OEMs.

"Windows 95 Referral Server" A program created by Microsoft in August 1996 concurrent with inclusion of the ICW in OSR 2.0 of Windows 95 to make it easier for users to establish a connection to the Internet. The ICW connected users automatically to the Referral Server, enabling users to choose from among a list of ISPs that participated in the Referral Server program.

"Windows 98" A client operating system developed by Microsoft that was commercially released in June 1998. Windows 98 is an improved version of Windows 95 that includes a range of new features and functionality. Windows 98 has been updated by interim releases provided to OEMs.

"Windows CE" A small operating system developed by Microsoft for use in, inter alia, handheld devices and television set-top boxes.

"Windows Explorer" A feature of the Windows 98 user interface that enables users to move seamlessly in the same browsing window between files stored on their hard drive, on an external disk drive, on a local or wide area network or on the Internet using the navigational paradigms of the Web (e.g., "Back" and "Forward" buttons, a list of "Favorite" information sources and a "History" of recently-accessed information).

"Windows Millenium" A client operating system developed by Microsoft that was commercially released in September 2000. Windows Millenium is an improved version of Windows 98 targeted primarily at home users.

"Windows NT" An operating system developed by Microsoft that was first commercially released in 1992. Windows NT has a fundamentally different architecture than Windows 95, Windows 98 and Windows Millennium. The three principal versions of Windows NT (3.1, 3.51 and 4.0) were targeted primarily at business customers. Windows NT is the predecessor of Windows 2000.

"Windows Resource Kit" Documentation and utilities provided by Microsoft to information technology professionals to assist them in deploying, supporting and understanding Windows 95. The resource kit is a technical resource that supplements the documentation included with Windows 95.

"Windows Update" A feature of Windows 98 that automatically detects when new enhancements to the operating system have not been installed on a user’s computer and allows the user to download such enhancements easily from a Microsoft Web site.

"WININET.DLL" The IE component of Windows that enables the operating system to retrieve data from the Internet or other remote storage locations (such as servers on a corporate intranet) using Internet protocols like HTTP. Through published APIs, this system service allows any ISV to embed into its products the ability to retrieve data from the Internet.

"Word" Microsoft Word is a word processing software program developed by Microsoft. Word is part of the Office suite of business productivity applications.

"World Wide Web" An element of the broader Internet, the World Wide Web (typically referred to as the Web) utilizes hyperlinking, a form of non-sequential text retrieval, to allow users to navigate among documents. The navigational paradigms of the Web include "Back" and "Forward" buttons, a list of "Favorite" Web pages and a "History" of recently accessed Web pages.

James Allchin Senior Vice President of the Personal and Business Systems Group at Microsoft at the time of trial and now Group Vice President of the Platforms Product Group at Microsoft. Microsoft’s third witness at trial.

Marc Andreessen Executive Vice President of Products and Marketing at Netscape at the time of trial and now Chairman of Loudcloud, a company supplying startup packages to electronic commerce companies. Deponent only.

James Barksdale President and CEO of Netscape at the time of trial and now a Partner of The Barksdale Group, a firm that advises, finances and services new Internet companies. Plaintiffs’ first witness at trial.

Stephen Case Chairman and CEO of AOL. Deponent only.

Brad Chase Vice President of Marketing and Software Developer Relations in the Personal and Business Systems Group at Microsoft at the time of trial and now Senior Vice President in charge of The Microsoft Network. Microsoft’s seventh witness at trial.

James Clark Co-founder and formerly Chairman and CEO of Netscape and now Chairman of myCFO, a firm that provides financial advisory services to wealthy individuals. Deponent only.

David Colburn Senior Vice President of Business Affairs at AOL at the time of trial and now President of Business Affairs at AOL. Plaintiffs’ second witness at trial and (as an adverse witness) Microsoft’s first rebuttal witness.

Michael Devlin President of Rational Software Corp. Microsoft’s fourth witness at trial.

Eric Engstrom Acting General Manager of the Windows Client and Collaboration Division, Multimedia, at Microsoft at the time of trial and now Chairman of Catalytic Software, Inc., a company creating a "just-in-time" software development infrastructure. Microsoft’s tenth witness at trial.

Gordon Eubanks CEO of Oblix and formerly CEO of Symantec Corp. Microsoft’s second rebuttal witness.

David Farber Alfred Fitler Moore Professor of Telecommunications Systems at the Moore School of Engineering of the University of Pennsylvania. Plaintiffs’ ninth witness at trial.

Edward Felten Assistant Professor of Computer Science at Princeton University. Plaintiff’s tenth witness at trial and plaintiffs’ third rebuttal witness.

Franklin Fisher Professor of Economics at MIT. Plaintiffs’ twelfth witness at trial and plaintiffs’ first rebuttal witness.

James Gosling Vice President and Chief Scientist of the Java Software Division of Sun. Plaintiffs’ eighth witness at trial.

William Harris, Jr. CEO of Intuit at the time of trial. Plaintiffs’ eleventh witness at trial.

Joachim Kempin Senior Vice President of the OEM Sales Group at Microsoft. Microsoft’s eleventh witness at trial.

Paul Maritz Group Vice President of Platforms and Applications at Microsoft at the time of trial and now a consultant to Microsoft on strategic and business issues. Microsoft’s second witness at trial.

Steven McGeady Vice President of the Content Group at Intel at the time of trial and now Vice President of the New Business Group at Intel. Plaintiffs’ fourth witness at trial.

Robert Muglia Senior Vice President of the Applications and Tools Group at Microsoft at the time of trial and now Group Vice President of the .NET Services Group at Microsoft. Microsoft’s twelfth witness at trial.

Cameron Myhrvold Vice President of the Internet Customer Unit, Strategic Relationships at Microsoft at the time of trial and now a Managing Director of Ignition Corp., an investment firm specializing in wireless Internet technologies. Microsoft’s sixth witness at trial.

Garry Norris Program Director of Sales and Marketing for Network Interface Cards at IBM. Plaintiffs’ second rebuttal witness.

William Poole Senior Director of Business Development for Windows at Microsoft at the time of trial and now Vice President of the Windows Digital Media Division at Microsoft. Microsoft’s fifth witness at trial.

Thomas Reardon Program Manager in the Interactive Media Group at Microsoft at the time of trial and now CEO of Avogadro, Inc., a company developing technology to connect the wired and wireless Internets. Deponent only.

John Rose Senior Vice President and Group General Manager of the Enterprise Computing Group at Compaq at the time of trial. Microsoft’s eighth witness at trial.

Daniel Rosen General Manager of New Technology at Microsoft at the time of trial and now a Partner of Frazier Technology Ventures, a venture capital fund. Microsoft’s ninth witness at trial.

Richard Schmalensee Gordon Y Billard Professor of Economics and Dean of the Sloan School of Management at MIT. Microsoft’s first witness at trial and Microsoft’s third rebuttal witness.

Brad Silverberg Senior Vice President of the Applications and Internet Client Group at Microsoft at the time of trial and now CEO of Ignition Corp., an investment firm specializing in wireless Internet technologies. Deponent only.

Benjamin Slivka General Manager in the Windows Group at Microsoft at the time of trial and now Director of Information Technology at Amazon.com. Deponent only.

John Soyring Director of Network Computing Software Services at IBM at the time of trial and now Vice President of E-Business Operating System Solutions at IBM. Plaintiffs’ sixth witness at trial.

Avadis Tevanian, Jr. Senior Vice President of Software Engineering at Apple. Plaintiffs’ third witness at trial.

Scott Vesey Windows Web Browser Product Manager at The Boeing Company. Deponent only.

Frederick Warren-Boulton A Principal with Microeconomic Consulting and Research Associates, Inc. Plaintiffs’ seventh witness at trial.

Glenn Weadock An independent software consultant. Plaintiffs’ fifth witness at trial.

Ron Whittier General Manager of the Content Group at Intel at the time of trial and now Senior Vice President and General Manager of the Interactive Media Sources Group at Intel. Deponent only.

Microsoft appeals from a final judgment entered on June 7, 2000 (i) holding it liable under Sections 1 and 2 of the Sherman Act and corresponding state-law provisions and (ii) entering far-reaching relief, including a breakup of the company. The district court had subject matter jurisdiction under 15 U.S.C. § 4 and 28 U.S.C. §§ 1331, 1337 and 1367(a). Microsoft filed its notices of appeal on June 13, 2000. This Court has jurisdiction under 28 U.S.C. § 1291.

1. Whether Microsoft’s design of its Windows operating systems to include Web browsing software constituted a tie in violation of Section 1 of the Sherman Act and corresponding state-law provisions.

2. Whether Microsoft maintained a monopoly in the alleged market for "Intel-compatible PC operating systems" through anticompetitive conduct—principally its design of Windows and its promotion and distribution agreements with Internet access providers—in violation of Section 2 of the Sherman Act and corresponding state-law provisions.

3. Whether Microsoft attempted to monopolize the alleged market for "Web browsers" through anticompetitive conduct in violation of Section 2 of the Sherman Act and corresponding state-law provisions.

4. Whether the extreme and unwarranted relief entered by the district court without conducting an evidentiary hearing and without permitting Microsoft to develop and present evidence must be reversed.

5. Whether the district court’s handling of the case (e.g., its failure to provide Microsoft with adequate time for discovery and to prepare for trial, its limitation on the number of witnesses, its use of "summary witnesses" and the resulting admission of large amounts of inadmissible hearsay) requires that the judgment be vacated.

6. Whether the district judge’s public statements about the merits of the case require that the judgment be vacated and the district judge disqualified from any further proceedings.

This case arises out of Microsoft’s competition with Netscape from 1995 to 1998—the so-called "browser war." In competing with Netscape to satisfy increasing demand for Internet functionality, Microsoft (i) developed new versions of its Windows operating system that included Internet technologies, (ii) distributed those technologies widely, and (iii) encouraged third parties to design their software products to take advantage of those technologies. Consumers clearly benefited from this competition. As the district court found, Microsoft’s conduct contributed significantly to (i) improving the quality of Web browsing software, (ii) lowering its cost, and (iii) increasing its availability. Microsoft’s inclusion of Internet technologies in Windows also benefited the thousands of software developers that create applications that run on the operating system. At the same time, nothing Microsoft did limited Netscape’s ability to compete: Netscape’s Web browsing software remained "fully interoperable" with Windows, and Netscape had unimpeded access to "every PC user worldwide." In fact, Netscape’s customer base grew dramatically during the period in question. To sanction Microsoft for improving its products and promoting and distributing them vigorously—as the district court did—would stifle innovation and chill competition, contrary to the purposes of the antitrust laws.

The proceeding below went badly awry from the outset. When this case was filed in May 1998, then Assistant Attorney General Joel Klein said that the DOJ had embarked on a "surgical strike," challenging Microsoft’s inclusion of Web browsing software in Windows. Steve Lohr, U.S. v. Microsoft: The Case, N.Y. Times, May 19, 1998, at A1. Over the next two years, however, the district court permitted plaintiffs to transform their case beyond recognition. As a result, what began as an attack on Microsoft’s addition of Internet technologies to Windows ended with an unprecedented order breaking up the company—a completely unjustified outcome that no one could have imagined at the outset.

The district judge’s extensive public comments about the merits of the case epitomize his disregard for proper procedure. The day after judgment was entered, news organizations began publishing stories based on interviews with the district judge. Two New York Times reporters, who liberally quoted the district judge in a recently-published book, disclosed that he granted them interviews "during the trial on the condition that his comments not be used until the case left his courtroom." Joel Brinkley & Steve Lohr, U.S. v. Microsoft 6 (2000). These "friendly, informal and unstructured" discussions were described as "a rare audience with a sitting judge during the course of a trial." Joel Brinkley & Steve Lohr, Retracing the Missteps in the Microsoft Defense, N.Y Times, June 9, 2000, at C8. Following entry of judgment, the district judge embarked on a speaking tour, appearing at antitrust conferences here and abroad to discuss his views of Microsoft and his reasons for breaking up the company. The district judge’s public comments would lead a reasonable observer to question his impartiality and—together with other procedural irregularities—the fairness of the entire proceeding.

On May 18, 1998, the DOJ and States filed separate complaints and motions for a preliminary injunction, alleging that Microsoft violated Sections 1 and 2 of the Sherman Act. The States also alleged violations of their antitrust laws. (Sections 1 and 2 of the Sherman Act and the States’ antitrust statutes are set forth in a separately-bound addendum.) Plaintiffs’ complaints contended that Microsoft unlawfully foreclosed Netscape from offering its Web browsing software, called Navigator, in an effort to protect Microsoft’s putative PC operating system monopoly. Plaintiffs asserted that Navigator could have become a competing "platform" to which applications like spreadsheets and word processors could be written, thus potentially reducing what plaintiffs viewed as the sole barrier to entry into the operating system business. DOJ Compl. ¶¶ 3-4, 7-9, 66-68; States Compl. ¶¶ 32-37. This so-called "applications barrier to entry" allegedly results from Microsoft’s success in encouraging independent software vendors ("ISVs") to create a large number of applications designed to run on Microsoft’s platform—Windows. DOJ Compl. ¶ 3; States Compl. ¶ 35.

Plaintiffs asserted two claims under Section 1. First, they alleged that Microsoft tied its Web browsing software, Internet Explorer ("IE"), to its Windows operating system. DOJ Compl. ¶¶ 134-37; States Compl. ¶¶ 93-95. This claim was the focal point of their complaints. DOJ Compl. ¶¶ 18-23, 103-23, 134-37; States Compl. ¶¶ 47-50, 54-69, 93-95. The alleged purpose and effect of this purported tie were "to foreclose competing browsers" from distribution by computer manufacturers ("OEMs"). DOJ Compl. ¶ 137. Second, plaintiffs alleged that Microsoft entered into unlawful exclusive dealing contracts with Internet service providers ("ISPs"), online services ("OLSs") and Internet content providers ("ICPs") for the promotion and distribution of IE. DOJ Compl. ¶¶ 130-33; States Compl. ¶¶ 96-97. Plaintiffs further alleged that Microsoft’s license agreements with OEMs were "exclusionary" because they did not allow OEMs to make modifications to Windows that purportedly would have made users more likely to use Navigator. DOJ Compl. ¶¶ 93-102, 130-33; States Compl. ¶¶ 96-97.

Plaintiffs also asserted two claims under Section 2. First, they alleged that Microsoft unlawfully maintained a monopoly in a market for "PC operating systems." DOJ Compl. ¶¶ 138-39; States Compl. ¶¶ 85-87. Second, they alleged that Microsoft attempted to monopolize a market for "Internet browsers." DOJ Compl. ¶¶ 140-41; States Compl. ¶¶ 88-90. Plaintiffs premised their Section 2 claims on the same conduct that underlay their Section 1 claims. DOJ Compl. ¶¶ 75-123; States Compl. ¶¶ 54-78. Their only additional allegation of anticompetitive conduct under Section 2 was their contention that Microsoft attempted on June 21, 1995 (without success) to induce Netscape not to compete in the alleged "Internet browser" market. DOJ Compl. ¶¶ 70-74; States Compl. ¶¶ 44-45.

The relief requested by plaintiffs likewise focused on distribution and promotion of Web browsing software. As the district court noted, plaintiffs sought to enjoin Microsoft from:

(1) entering into or enforcing certain contractual provisions which allegedly foreclose distribution and/or promotion of competing Internet browsers; (2) distributing a "bundled" version of its operating system and browser unless Microsoft provides a practical way of removing browser functions and provides OEMs that do not wish to license the browser an appropriate deduction from the royalty fee; (3) distributing a "bundled" version of its operating system and browser unless Microsoft treats Netscape Corporation’s ("Netscape") browser the same as its own with respect to inclusion and removal; and (4) retaliating against any OEM that chooses to remove Microsoft’s browser from Windows 98.

1998-2 Trade Cas. (CCH) ¶ 72,261, at 82,668 (D.D.C. Sept. 14, 1998). Plaintiffs did not mention, much less seek, dissolution of Microsoft or any of the other extreme relief ultimately awarded.

The district court advanced trial on the merits and consolidated it with the hearing on plaintiffs’ preliminary injunction motions. 5/22/98 Order. Over Microsoft’s objection, the district court scheduled trial to begin on September 8, 1998, less than four months away. 5/22/98 Tr. at 31-32. The district court also limited each side to 12 "summary witnesses" in its case in chief, required that all direct testimony be filed in writing and imposed strict limits on the use of deposition testimony. 6/9/98 Tr. at 2; Pretrial Order No. 1 ¶¶ 11, 12; Pretrial Order No. 2 ¶ 4. The district court clearly envisioned an abbreviated trial focused on plaintiffs’ tying claim, stating, "I am prepared to devote the month of September to the trial of this case." 6/9/98 Tr. at 3.

Following this Court’s June 23, 1998 decision in the Consent Decree Case—which rendered plaintiffs’ tying claim legally untenable—plaintiffs raised a variety of new allegations, seeking to convert their tightly-focused case into an omnibus Section 2 action. This expansion of the case became apparent in August 1998 when, without amending their complaints, plaintiffs began pursuing in discovery new accusations concerning Microsoft’s interactions with Sun, Intel, Apple, RealNetworks and IBM. Over Microsoft’s objection, the district court pressed ahead with its plan for a highly-expedited trial, assuring Microsoft that it "would not be making any findings" and "would not predicate any relief" on matters unrelated to the conduct challenged in the complaints, 9/17/98 Tr. at 7, assurances it would later repudiate.

Despite Microsoft’s motion for a continuance, trial began on October 19, 1998, five months after the complaints were filed. The parties concluded their cases-in-chief on February 26, 1999 and presented rebuttal evidence between June 1 and June 24, 1999.

The district court issued findings of fact on November 5, 1999. 84 F. Supp. 2d 9 (D.D.C. 1999). Although 412 paragraphs long, the district court’s findings contain no citations to the record, making it impossible to ascertain the purported basis for many findings. The most inculpatory "findings" consist of sweeping, conclusory assertions, unfounded inferences and speculative predictions masquerading as "facts." E.g., id. at 111-12 (FF 411-12). In commenting to the New York Times on the harsh tone of his findings, the district judge explained his judicial philosophy towards Microsoft as follows:

I like to tell the story of the North Carolina mule trainer . . . . He had a trained mule who could do all kinds of wonderful tricks. One day somebody asked him: "How do you do it? How do you train the mule to do all these amazing things?" "Well," he answered, "I’ll show you." He took a 2-by-4 and whopped him upside the head. The mule was reeling and fell to his knees, and the trainer said: "You just have to get his attention." I hope I’ve got Microsoft’s attention.

Brinkley & Lohr, supra at 278. In making its findings, which adopted nearly all of plaintiffs’ factual assertions, the district court ignored vast amounts of uncontradicted evidence submitted by Microsoft on the central issues in the case.

After the failure of an intense four-month mediation before Chief Judge Posner, the district court entered its conclusions of law on April 3, 2000. 87 F. Supp. 2d 30 (D.D.C. 2000). (Holding that the relevant state-law provisions are coterminous with Sections 1 and 2 of the Sherman Act, id. at 54-55, the district court reached the same conclusions under federal and state law.)

Tying. The district court held that Microsoft violated Section 1 by tying IE to Windows. Id. at 47-51. In so ruling, the district court refused to apply the test set out by this Court in United States v. Microsoft Corp., 147 F.3d 935 (D.C. Cir. 1998). Stating that it was obliged to follow this Court’s rulings only "until the trail falters," the district court concluded that this Court’s "undemanding test" is "inconsistent with the pertinent Supreme Court precedents," 87 F. Supp. 2d at 47, even though, in formulating its test, this Court expressly distinguished the two cases cited by the district court, Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2 (1984), and Eastman Kodak Co. v. Image Technical Services, Inc., 504 U.S. 451 (1992). 147 F.3d at 946-47, 950.

Exclusive Dealing. The district court rejected plaintiffs’ exclusive dealing claim under Section 1, holding that Microsoft’s promotion and distribution agreements for IE "did not foreclose enough of the relevant market to constitute a § 1 violation." 87 F. Supp. 2d at 53. The district court explained:

Microsoft’s multiple agreements with distributors did not ultimately deprive Netscape of the ability to have access to every PC user worldwide to offer an opportunity to install Navigator. Navigator can be downloaded from the Internet. It is available through myriad retail channels. It can (and has been) mailed directly to an unlimited number of households.

Id. (emphasis added). The district court determined that Netscape was able to distribute 160 million copies of Navigator in 1998 alone, contributing to an increase in Navigator’s installed base from 15 million in 1996 to 33 million in December 1998. Id. Although distribution foreclosure was also central to plaintiffs’ Section 2 claims, the district court contended that the failure of the agreements to foreclose enough of Navigator’s distribution "to constitute a § 1 violation in no way detracts from the Court’s assignment of liability for the same arrangements under § 2." Id.

Monopoly Maintenance. The district court held that Microsoft possesses monopoly power in a market for "Intel-compatible PC operating systems" and that Microsoft maintained that monopoly by anticompetitive means in violation of Section 2. Id. at 35-44. According to the district court, Microsoft’s alleged monopoly is protected by a single barrier to entry—the "applications barrier to entry." Id. at 36. For anticompetitive conduct, the district court relied primarily on Microsoft’s purported exclusion of Navigator from two specific channels of distribution—the OEM and Internet access provider ("IAP") channels, id. at 39-42—despite finding that Netscape had access to "every PC user worldwide," id. at 53. The other challenged acts, while not themselves anticompetitive, were held to have "supplemented Microsoft’s efforts in the OEM and IAP channels." Id. at 43.

Attempted Monopolization. The district court found that Microsoft attempted to monopolize the "browser" market in violation of Section 2 based largely on the same allegedly anticompetitive conduct. Id. at 45-46. Despite acknowledging that Microsoft’s intent was to persuade ISVs that Navigator would not emerge as the "standard" Web browsing software, the district court reasoned that Microsoft possessed the requisite specific intent to obtain monopoly power because "there is no evidence that Microsoft tried" to prevent its efforts "from achieving overkill." Id. at 45. The district court also determined that Microsoft’s discussions with Netscape in June 1995 created a dangerous probability of monopolization, even though Microsoft had not yet released Windows 95 and thus had no share of the alleged "browser" market at the time. Id. at 45-46. The district court stated that Microsoft has since "revived the dangerous probability" of monopolization because IE’s share of browser usage has "risen above fifty percent," id. at 46—even though AOL, which acquired Netscape during trial, could reduce IE’s usage share substantially by building AOL’s proprietary client software on Navigator instead of IE.

The district court’s order accompanying its conclusions of law stated that it would enter relief "following proceedings to be established by further Order of the Court." Id. at 57. The district court thereafter held two chambers conferences to discuss the remedies phase of trial. At both conferences, Microsoft stressed that it could not take a position on the appropriate procedure to be employed until it received notice of plaintiffs’ proposed relief. 4/4/00 Tr. at 14-16, 18; 4/5/00 Tr. at 7-8. When Microsoft asked whether it "contemplate[d] further proceedings," the district court replied, "Yes. Yes. I would assume that there would be further proceedings," adding that it might "replicate the procedure at trial with testimony in written form subject to cross-examination." 4/4/00 Tr. at 8-9, 11. The district court subsequently issued Scheduling Order No. 8, which required Microsoft to submit only (i) its "summary response" to plaintiffs’ proposal, (ii) its "counter-proposal(s)" to the plaintiffs’ request, and (iii) its "recommendations for future proceedings on the issue of remedy." Scheduling Order No. 8 at 2.

On April 28, 2000, plaintiffs filed their proposed decree, together with six lengthy declarations and numerous new exhibits. Although their complaints did not even hint at such draconian relief, plaintiffs requested that Microsoft be broken up. Proposed Final J. § 1. Plaintiffs’ proposed decree also included equally extreme "conduct" provisions that extended far beyond the case that was tried and encompassed products wholly outside the markets defined by the district court. Id. § 3. For example, plaintiffs requested that Microsoft be required to disclose proprietary information about its desktop, server and embedded operating systems to all firms claiming a desire to make their products "interoperate effectively" with those operating systems, id. § 3.b—a group that includes all of Microsoft’s competitors.

In its "summary response" to plaintiffs’ proposed decree, Microsoft expressly requested discovery and a hearing on relief. MS Summ. Resp. to Pls.’ Proposed Final J. at 6-7; MS Position as to Future Proceedings. By filing six declarations and many new exhibits with their proposed decree, plaintiffs acknowledged that the trial record was insufficient to support their requested relief. Nevertheless, the district court announced on May 24, 2000 that it intended "to proceed to the merits of the remedy." 5/24/00 am Tr. at 5. When Microsoft asked about further proceedings, the district court responded, "I’m not contemplating any further process." 5/24/00 pm Tr. at 33. Microsoft then filed an offer of proof, supplemented seven days later, summarizing the anticipated testimony of 23 individuals who would testify at a hearing on relief. MS Offer of Proof; MS Supplemental Offer of Proof.

The district court signed plaintiffs’ proposed final judgment as ultimately proffered without a single substantive change, thus awarding radical relief without conducting an evidentiary hearing or making any findings to justify that relief. 97 F. Supp. 2d 59, 63-74 (D.D.C. 2000). In an accompanying opinion, bereft of a single citation to law or evidence, the district court stated that "a structural remedy has become imperative" because Microsoft "does not yet concede that any of its business practices violated the Sherman Act." Id. at 62. Far from finding that the relief entered will increase competition, the district court noted that even "purportedly knowledgeable people" do not know what "may or may not ensue if the proposed final judgment is entered." Id.

Explaining its decision not to hold an evidentiary hearing on relief, the district court stated that it "has found testimonial predictions of future events generally less reliable even than testimony as to historical fact, and cross-examination to be of little use in enhancing or detracting from their accuracy." Id. In an astounding abdication of judicial responsibility, the district court remarked:

Plaintiffs won the case, and for that reason alone have some entitlement to a remedy of their choice. Moreover, plaintiffs’ proposed final judgment is the collective work product of senior antitrust law enforcement officials of the United States Department of Justice and the Attorneys General of 19 states, in conjunction with multiple consultants. These officials are by reason of office obliged and expected to consider—and to act in—the public interest; Microsoft is not.

Id. at 62-63. The district judge elaborated on his opinion in his discussions with the press, stating, "I am not aware of any case authority that says I have to give them any due process at all. The case is over. They lost." Brinkley & Lohr, N.Y. Times, supra at C8. He also reportedly remarked, "it’s procedurally unusual to do what Microsoft is proposing—are you aware of very many cases in which the defendant can argue with the jury about what an appropriate sanction should be? Were the Japanese allowed to propose the terms of their surrender? The government won the case." John R. Wilke, For Antitrust Judge, Trust, or Lack of It, Really Was the Issue, Wall St. J., June 8, 2000, at A8.

America’s computer industry, the subject of this case, is the envy of the world. It is characterized by falling prices and unprecedented levels of investment and innovation, the opposite of what one would expect if the industry were under the thumb of an oppressive monopolist. Schmalensee ¶¶ 61-81; Maritz ¶¶ 70-73, 75-105; see also 11/19/98 am Tr. at 45; 11/19/98 pm Tr. at 51-53; 6/16/99 am Tr. at 15-17. Consumers—the intended beneficiaries of the antitrust laws—have greatly benefited from Microsoft’s efforts to offer improved products at attractive prices. Schmalensee ¶¶ 255-82; Maritz ¶ 74; see also 1/21/99 pm Tr. at 35-40; 6/21/99 am Tr. at 6-19; DX 2098 at A1, E4; DX 2748. Indeed, when asked whether Microsoft had harmed consumers, plaintiffs’ own economist, Franklin Fisher of MIT, candidly replied, "[O]n balance, I would think the answer was no, up to this point." 1/12/99 am Tr. at 29.

The district court nevertheless found that Microsoft violated the antitrust laws by developing and marketing improved versions of Windows in response to demand for Internet-enabled products. Condemning Microsoft’s efforts to improve Windows and make those improvements broadly available turns the antitrust laws on their head. To be sure, Microsoft "set out to maximize Internet Explorer’s share of browser usage at Netscape’s expense," 87 F. Supp. 2d at 39, but that is the essence of competition. What matters is that Microsoft did nothing to prevent Netscape from getting its products into the hands of consumers.

Unlike other companies in the computer industry such as IBM and Apple, Microsoft has always focused on software. Maritz ¶ 44; 84 F. Supp. 2d at 13 (FF 5). Starting with the emergence of the IBM personal computer ("PC") in 1981, Microsoft became a leading developer of operating systems. Id. (FF 6-9). Early on, Microsoft recognized that operating systems that serve as a common "platform" for applications and that run on PCs supplied by a wide range of OEMs would provide enormous consumer benefit. Maritz ¶ 46. In part because of Microsoft’s success in developing such platforms, consumers today can choose from tens of thousands of applications and thousands of PC models that are compatible with one another. Maritz ¶¶ 6, 47.

There is no universally accepted definition of operating systems because they have evolved over time. Allchin ¶ 30; 11/16/98 am Tr. at 70-72; see also 12/8/98 am Tr. at 44, 48-49, 58. At a bare minimum, operating systems serve as the computer’s "central nervous system," scheduling the execution of tasks by the microprocessor and controlling the flow of information within the computer and between the computer and peripheral devices such as printers. Allchin ¶ 30; 6/21/99 am Tr. at 19-20. In response to changes in microprocessor technology and consumer demand, operating system vendors have continually added new features and functionality to their products, often integrating capabilities previously provided by standalone software products. Allchin ¶¶ 38-40; see also 6/21/99 pm Tr. at 63-65; DX 2098 at E4; DX 2764. For example, in the early 1990s, many firms offered their own implementations of what is known as a TCP/IP stack (the network protocols used to transmit data over the Internet), which they sold for as much as $495 per copy, more than five times the retail price of Windows 98. Allchin ¶¶ 24-26, 55. In response to demand for Internet connectivity, however, Microsoft and other firms began including a TCP/IP stack as a standard feature of their operating systems without additional charge. Allchin ¶ 56; 11/16/98 am Tr. at 72-75.

The principal function of operating systems today is to serve as platforms on which applications (such as spreadsheets or databases) run. 84 F. Supp. 2d at 19-20 (FF 37); Maritz ¶ 234; Allchin ¶ 34. Applications rely on "system services" provided by operating systems through application programming interfaces ("APIs"). 84 F. Supp. 2d at 12 (FF 2). When an application "calls" a particular API, the operating system supplies the "system service" associated with that API by causing the microprocessor to execute a specified set of instructions. Id.; Allchin ¶ 46; Devlin ¶ 12. The availability of such "system services" is highly efficient, freeing ISVs from the need to "reinvent the wheel" by including software code in their products to perform commonly-needed functions. Allchin ¶ 50; Devlin ¶ 14. ISVs thus can focus on adding innovative features to their products. Maritz ¶¶ 181-82; Allchin ¶ 50.

ISVs need stable and well-defined platforms. Maritz ¶ 167. If OEMs were permitted to modify Windows—installing some parts of it, but not others—ISVs would not know whether the system services on which their applications rely would be present on any given PC. Maritz ¶ 168; Allchin ¶ 50; Devlin ¶¶ 14-20; Kempin ¶ 29. Microsoft’s license agreements with OEMs thus have always provided, consistent with Microsoft’s rights under federal copyright law, that OEMs cannot modify Windows without Microsoft’s permission. Kempin ¶ 25. In contrast, the UNIX operating system, developed by Bell Laboratories in the 1970s, was allowed to fragment as a platform. Maritz ¶ 172. As a result, applications written for one version of UNIX will frequently not run on other versions, making UNIX applications less abundant and more expensive. Maritz ¶ 173; Devlin ¶¶ 18-19; Kempin ¶ 30.

Modern operating systems perform two other related functions. First, they provide a "user interface," i.e., the means by which a user interacts with a computer. Allchin ¶¶ 58-62. User interfaces for computers have evolved dramatically, from punch card readers, to teletype terminals, to character-based user interfaces, to graphical user interfaces. Allchin ¶ 59. Second, operating systems enable users to find and view information contained in various storage devices. Allchin ¶¶ 63-74. These storage devices can be "local," such as a floppy diskette, a CD-ROM drive and the hard drive built into a computer, or "remote," such as "local area networks" that connect computers in a particular office, "wide area networks" that connect computers in geographically separated offices, and the Internet. Allchin ¶¶ 64, 78; DX 2098 at B2; DX 2161.

In 1981, Microsoft released its first operating system, MS-DOS, which had a character-based user interface that required users to type specific instructions to perform tasks. 84 F. Supp. 2d at 13 (FF 6). In 1985, Microsoft introduced a new product called "Windows" that included a graphical user interface, enabling users to perform tasks by clicking on icons on the screen using a mouse. Id. at 13 (FF 7). Although initially just a "shell" running on MS-DOS, Windows assumed more and more operating system functionality over time. Id. Windows 3.0, shipped in May 1990, was the first successful version of Windows. Schmalensee App. C ¶ 12; Maritz ¶ 90; Allchin ¶ 303. In 1995, Microsoft released Windows 95, which integrated the functionality of Windows 3.1 and MS-DOS in a single operating system and "enjoyed unprecedented popularity with consumers." 84 F. Supp. 2d at 13 (FF 8). Microsoft shipped Windows 98, the successor to Windows 95, in June 1998. Id.

Many other companies develop and market operating systems, including (i) IBM, which distributes MVS, AIX, OS/2 and PC-DOS; (ii) Apple, which distributes the Mac OS; (iii) Sun, which distributes Solaris and JavaOS; (iv) SCO, which distributes UnixWare and OpenServer; (v) Be, which distributes BeOS; and (vi) Caldera and Red Hat, which distribute Linux. See Schmalensee ¶¶ 118, 135; Maritz ¶¶ 207-33, 244; Allchin ¶ 276. Some companies also create programs that sit between operating systems and applications. Maritz ¶ 235; Allchin ¶ 35. This "middleware" layer can provide system services to applications via APIs, thus serving as a platform for software development and subsuming the primary function of an operating system. Maritz ¶¶ 235-36; Allchin ¶ 35. Microsoft believed, and the district court found, that Navigator had the potential to develop into such a middleware platform and thus compete with Windows for the attention of ISVs. 84 F. Supp. 2d at 28 (FF 69); see also DX 2164.

Gordon Moore, one of Intel’s founders, correctly predicted in 1965 (in what came to be known as "Moore’s Law") that microprocessor capabilities would double every 18 to 24 months. Maritz ¶ 81. Dramatic improvements in microprocessors regularly alter the entire competitive landscape of the industry. Maritz ¶¶ 82-83. As Intel chairman Dr. Andrew Grove described in his book, Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company, such technological advances—known as "inflection points" or "paradigm shifts"—can quickly diminish the value of (or eliminate altogether) entire categories of products, making the computer industry inherently unpredictable. Schmalensee ¶ 63; Maritz ¶¶ 12-13, 83-86; 11/19/98 am Tr. at 53. Hence, the greatest competitive threat to a leading product frequently comes not from another product within the same category, "but rather a technological advance that renders the boundaries defining the category obsolete." 84 F. Supp. 2d at 26 (FF 59).

Microsoft itself was born of an inflection point—the emergence of PCs in a world previously dominated by expensive mainframes and minicomputers. Maritz ¶¶ 14, 87. Established companies like IBM and DEC failed to appreciate the significance of the PC, which permitted Microsoft and other startups like Dell, Compaq and Gateway to thrive. Maritz ¶¶ 14, 76. For example, Ken Olson, the founder of DEC, is said to have remarked in 1977 that there was no reason for people to have computers in their homes. Maritz ¶ 88.

Over the past 15 years, Microsoft has survived several inflection points that could have destroyed its operating system business. Maritz ¶¶ 15, 89. In the late 1980s, microprocessors became powerful enough to support graphical user interfaces. Maritz ¶ 15. Had Microsoft not managed to enhance MS-DOS with Windows 3.0, competitors such as Apple and IBM could have captured the business. Maritz ¶¶ 15, 89-90. The transition in the early 1990s from "16-bit" to "32-bit" microprocessors was another inflection point. Maritz ¶¶ 15, 91. Had Microsoft not responded with two new 32-bit operating systems—Windows 95 and Windows NT—consumers might have chosen other operating systems. Maritz ¶¶ 15, 92-94.

The rise of the Internet presents another inflection point, which "could oust the PC operating system from its position as the primary platform for applications development and the main interface between users and their computers." 84 F. Supp. 2d at 26 (FF 60). In May 1995, Bill Gates described the challenge of "The Internet Tidal Wave":

Perhaps you have already seen memos from me or others here about the importance of the Internet. I have gone through several stages of increasing my views of its importance. Now I assign the Internet the highest level of importance. In this memo I want to make clear that our focus on the Internet is critical to every part of our business. The Internet is the most important single development to come along since the IBM PC was introduced in 1981. It is even more important than the arrival of [the] graphical user interface (GUI).

GX 20 at 112876. Had Microsoft not added Internet technologies to its products, it would be an anachronism today, Maritz ¶¶ 55-61, 95-103, for "the Internet has become both a major inducement for consumers to buy PCs for the first time and a major occupier of the time and attention of current PC users," 84 F. Supp. 2d at 28 (FF 70). Indeed, many in 1995 believed that Microsoft had missed the boat on the Internet and was doomed as a result. Maritz ¶ 97.

Even as Microsoft grapples with the Internet, it faces a new inflection point: the advent of "information appliances" (such as television set-top boxes, handheld devices and game consoles) and the transformation of software from shrink-wrapped products to Web-based services. Maritz ¶¶ 17, 104-05, 266-73; 1/28/99 am Tr. at 35-38; 6/16/99 am Tr. at 26-27; 6/22/99 pm Tr. at 27-28. Just as PCs rendered mainframes less important, this new breed of smaller, less expensive computing devices threatens to do the same to PCs. Maritz ¶¶ 18, 105, 274-79, 281. Customers who otherwise would use a PC "for storing addresses and schedules, for sending and receiving E-mail, for browsing the Web, and for playing video games might be able to choose a complementary set of information appliances over an Intel-compatible PC system without incurring substantial costs." 84 F. Supp. 2d at 15-16 (FF 23); see also DX 2785 at 1 ("[T]he biggest challenge to Microsoft’s . . . operating system franchise is that there would be many computers that are not running Windows (that are simply Net devices) on which AOL could effectively be the operating system."). Microsoft thus has developed a new embedded operating system, called Windows CE, designed for use with information appliances, Maritz ¶ 281, and it is now betting the company on a dramatic new initiative, called ".NET," intended to provide an infrastructure that will enable thousands of firms to provide a wide range of compatible services to all types of information appliances, MS Offer of Proof at 21.

Competition in developing and marketing software is intense. Maritz ¶ 75; Schmalensee ¶¶ 28-90. Even the district court acknowledged that the software business "is characterized by dynamic, vigorous competition." 84 F. Supp. 2d at 25 (FF 59). In addition to the destabilizing effects of constant technological change, the very nature of software makes the business intensely competitive. Maritz ¶¶ 19-20, 77. For example, software never wears out and is easily copied. Maritz ¶ 20. Consequently, a company must compete not only against its competitors’ products, but also against prior versions and illegal copies of its own products. Maritz ¶¶ 20, 120-23; see also 84 F. Supp. 2d at 25 (FF 57-58). Because existing software can be improved in myriad ways and microprocessor power continues to increase, opportunities for creating new and improved products are essentially infinite. Maritz ¶¶ 106-07; Schmalensee ¶¶ 45-46.

More fundamentally, unlike industries that require substantial investments in infrastructure or access to scarce natural resources, software is based entirely on ideas implemented as written instructions that can be created by literally millions of people. Maritz ¶¶ 19, 109-14; Schmalensee ¶¶ 37-44. For example, a Finnish graduate student named Linus Torvalds created the Linux operating system and put his fledgling code on the Internet in October 1991, thereby enlisting help from other developers. Maritz ¶ 216; see also 84 F. Supp. 2d at 23 (FF 50). Linux today consists of several million lines of code and is comparable in functionality and complexity to Microsoft’s operating systems. Schmalensee ¶¶ 138-40; Maritz ¶ 216. Once created, software can be replicated and distributed pervasively at nominal cost. Maritz ¶ 19, 115-19; Schmalensee ¶ 50; see also 84 F. Supp. 2d at 18 (FF 30).

At the outset of the PC era, Microsoft adopted a business model with four basic elements. Maritz ¶¶ 21, 124, 129-34. First, Microsoft creates operating systems that provide a well-defined platform for developing and running applications despite differences in underlying PC hardware. Maritz ¶¶ 130, 167-75. Second, Microsoft’s operating systems provide a consistent user interface that enables users to interact with their computers in a uniform way and thus to transfer their knowledge from one computer to another. Maritz ¶ 131. Third, to promote their widespread use, Microsoft licenses its operating systems to OEMs at attractive prices, typically far less than 5% of the price of a new computer. Maritz ¶¶ 22-23, 132. Fourth, Microsoft works closely with OEMs, ISVs and users to ascertain their needs and to "evangelize" the features and functionality of Microsoft’s platforms. Maritz ¶¶ 133, 136-52.

These four elements are directed at a common goal: creating a platform—Windows—that enables thousands of hardware and software vendors to build a wide range of compatible products. Maritz ¶¶ 21-26, 134, 176-86. Such broad compatibility—which gives rise to a phenomenon known as "network effects"—provides substantial benefits. OEMs benefit because their PCs can run all of the many applications written for Windows and because users are familiar with the Windows user interface. Maritz ¶¶ 22, 177-80; Rose ¶ 8. ISVs benefit because their applications can make use of system services provided by Windows and because they can write applications once that will run on a broad range of PCs. Maritz ¶¶ 22, 181-82; Devlin ¶¶ 14-20. Consumers benefit because they can choose from thousands of PC models and applications that work well with one another and because such compatibility fosters intense competition among OEMs and ISVs to deliver innovative products at attractive prices. Maritz ¶¶ 22, 183-86. The broad compatibility provided by Windows—which would be lost if OEMs were permitted to install some parts of the operating system but not others—helped to propel widespread use of PCs in the workplace, schools and many homes. Maritz ¶¶ 25-26, 403.

Microsoft’s "high volume/low price" business model stands in stark contrast to those of rivals like Apple and Sun, which develop and market complete computer systems that include both hardware and software. Maritz ¶¶ 24, 125-26. This "single vendor" approach makes it easier to ensure that all components of a computer work well together, Maritz ¶ 125, but prices for Apple’s and Sun’s products are considerably higher than comparable offerings from OEMs and ISVs that build on Windows, Maritz ¶¶ 24, 184-85. In fact, the district court found that "the package of hardware and software comprising an Apple PC system is priced substantially higher than the average price of an Intel-compatible PC system." 84 F. Supp. 2d at 15 (FF 21).

The district court found that Microsoft’s decision to include Internet technologies in Windows was motivated primarily by a desire to prevent Navigator from succeeding as a rival platform. 84 F. Supp. 2d at 49 (FF 155). In fact, although Microsoft came to regard Netscape as a platform competitor, Microsoft’s decision to include Internet technologies in Windows predated Netscape’s emergence as such. See Schmalensee ¶¶ 207-10, 214; Allchin ¶¶ 204-28; 1/26/99 am Tr. at 11; 2/2/99 pm Tr. at 48-50; DX 223; DX 224; DX 225; DX 302; DX 327; DX 350; DX 400; DX 409; DX 623; DX 2098 at F1. Once Microsoft did recognize Navigator as a potential platform, Microsoft redoubled its efforts to provide top-notch Internet support in its platform, Windows, but those efforts were already underway. 1/27/99 pm Tr. at 42.

Starting in 1993, Microsoft realized that users would want operating systems that provided Internet access. Allchin ¶¶ 210, 216-18; 2/2/99 pm Tr. at 50-54; DX 224; DX 327. Microsoft also foresaw that ISVs would want to include Internet-related features in their products and thus would look to Windows to provide system services that would enable such features. Schmalensee ¶¶ 211-12; Allchin ¶ 17; see also GX 21 at 2; DX 734 at 103432-38. Microsoft thus decided in early 1994 to provide Internet support, including Web browsing software, in future operating systems. Allchin ¶¶ 16-17, 79, 210, 219-28, 260; 1/27/99 pm Tr. at 29-31; 2/2/99 pm Tr. at 49-50.

Microsoft’s decision to "include built-in access to the Internet" in Windows 95, code-named "Chicago," was publicly announced in April 1994—the month in which Netscape was incorporated and six months before Netscape released a beta test version of Navigator. Allchin ¶ 205; DX 458A; DX 459A; DX 459B. By the time Netscape commercially released the first version of Navigator in December 1994, Microsoft had already completed much of the "plumbing" needed to provide Internet support in Windows 95. Allchin ¶ 205; 2/2/99 pm Tr. at 48.

Jim Clark, Netscape’s co-founder, testified that before Netscape released its first beta test version of Navigator, "Bill Gates specifically told me he was going to give away the Web browser in the operating system." DX 2562 at 35-36. According to Clark, Gates stated at a September 1994 conference, "‘I hope no one plans to make money on browsers because they will get bundled into the operating system.’ And this was before Netscape released the beta." DX 2562 at 36.

Microsoft needed to add Web browsing software to Windows 95 to make the new operating system competitive with rival products such as IBM’s OS/2, Apple’s Mac OS and Sun’s Solaris. Schmalensee ¶ 212; Allchin ¶ 231; 2/2/99 pm Tr. at 60-61, 69-70; DX 2591 at 212. Ben Slivka, who led the team creating IE (code-named "O’Hare"), testified that Web browsing software "was a necessary feature to make Windows competitive with other operating systems" and that "one of the key motivations for doing Internet Explorer was that IBM released OS/2 . . . and trumpeted very loudly that it had integrated web access." DX 2591 at 212, 398. As Slivka explained, IBM’s principal marketing message for OS/2 was "‘Get on the Internet.’" DX 2591 at 398; see also DX 251. Thomas Reardon, another "O’Hare" developer, testified that "the critical date for me" was September 8, 1994, "the date that IBM announced that [OS/2] would include browsing technology. And from that date forward, it became my sole job . . . to think about browser technology in the [operating system]." DX 2606 at 58.

In a November 7, 1994 e-mail, Paul Maritz, then responsible for all of Microsoft’s operating systems, stated that an "important objective[]" was to "[e]nsure that Windows is very well connected, in particular ensure it is straightforward for a user to get connected to the Internet, and ease-and-ubiquity of connection do not become differentiating attributes of Macintosh or OS/2." DX 267 at 103263. To remain competitive, Maritz noted, Windows 95 "will ship a standard initial-access and [World Wide Web] browsing package (code-named ‘O’Hare’)." DX 267 at 103263; see also 1/27/99 pm Tr. at 33-36. A few days later, Maritz wrote that "‘one button install’ for Internet access is a must-have for the Windows platform, as soon as possible." DX 269 at 103268. Maritz continued:

Today attaching to provide [Web] access to the Internet from a PC is too complicated for a consumer user to deal with. If IBM (or Apple) can establish OS/2 (or the Mac) as the easy-to-use way to get access to the Internet, it will create a powerful consumer imperative that we DO NOT WANT to see happen.

DX 269 at 103268; see also 1/27/99 pm Tr. at 36-39.

Netscape was well aware from the outset that operating systems, including Windows 95, would include Web browsing software. In a January 16, 1995 private placement memorandum, Netscape stated:

Microsoft Corporation is already licensing browser software from Spyglass and has announced its intentions to add functionality to the browser software and to bundle it with its Windows 95 operating system. The Company believes that the other primary PC operating system vendors, Apple Computer, Inc. and International Business Machines Corporation ("IBM"), will also eventually incorporate some Web browser functions into their operating systems as standard features. This may also be true of UNIX operating system vendors, such as Sun Microsystems, Inc., Hewlett-Packard Company, IBM, Digital, The Santa Cruz Operation, Inc. and SGI. If these companies incorporate Web browser functionality into their software products, they could subsequently offer this functionality at little or no additional costs to customers.

DX 68 at 69242; see also Schmalensee ¶ 213; 1/19/99 am Tr. at 15-18; 1/27/99 pm Tr. at 39-42. Indeed, Netscape urged Microsoft in late 1994 to include Netscape’s Web browsing software in Windows 95. DX 6; DX 792.

The district court acknowledged that "consumers in 1995 were already demanding software that enabled them to use the Web with ease, and IBM had announced in September 1994 its plan to include browsing capability in OS/2 Warp at no extra charge. Microsoft had reason to believe that other operating-system vendors would do the same." 84 F. Supp. 2d at 45 (FF 140). The district court nevertheless found that "personnel developing Internet Explorer at Microsoft contemplated" including IE "in a bundle of software that would have been sold as an add-on, or ‘frosting,’ to Windows 95." Id. at 44 (FF 137). The district court further found that "as late as the fall of 1994, Microsoft was planning to include low-level Internet ‘plumbing,’ such as a TCP/IP stack, but not a browser, with Windows 95." Id. at 49 (FF 156).

To the contrary, Microsoft always intended to include IE "in all versions of Windows 95. The only issue was one of schedule." DX 2591 at 222; see also DX 2591 at 325, 440. When Slivka assumed control of the O’Hare project in October 1994, it appeared that "Windows 95 was going to ship so soon there was no way we could get a Web browser done in time to be part of [it]." DX 2591 at 277. But "[a]fter a couple of months," Slivka realized that "Windows 95 was going to take longer than [others] hoped," thus making it possible "to get the browser done in time to release [it] with Windows 95." DX 2591 at 277-78. Maritz explained:

we had a concern as to whether we would be able to get the Internet Explorer technology developed in time for the initial shipment of Windows 95. So, for a time there was some feeling that we would ship it later and make it available through a package to be called "Frosting."

1/27/99 pm Tr. at 30-31. Because the schedule for Windows 95 slipped—as often happens with software products—Microsoft was able to include IE in the version of Windows 95 supplied to OEMs in July 1995. 1/27/99 pm Tr. at 31; see also 84 F. Supp. 2d at 49 (FF 158); Allchin ¶ 230.

"Since the release of Internet Explorer 1.0 in July 1995, Microsoft has distributed every version of Windows with Internet Explorer included." 84 F. Supp. 2d at 58 (FF 202). IE was not included, however, in the initial retail version of Windows 95 released in August 1995 for two reasons: (i) the retail version had to be ready before the OEM version in order to get boxed copies into stores prior to the launch date, and (ii) there was concern that the Microsoft Network could not handle all of the requests for Internet signup if IE were included in the initial retail version. Allchin ¶¶ 246-49; 1/27/99 pm Tr. at 30-31; 2/2/99 pm Tr. at 58-61. (The district court incorrectly stated that Microsoft allowed OEMs to ship Windows 95 without IE for a few m