2 of 872 DOCUMENTS
UNITED STATES OF AMERICA, Plaintiff v. MICROSOFT CORPORATION, Defendant.
Civil Action No. 98-1232 (CKK)
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
2002 U.S. Dist. LEXIS 22864; 2002-2 Trade Cas. (CCH) P73,860
November 03, 2002, Decided
DISPOSITION: Final judgment entered.
CORE TERMS: final judgment, window, operating system, software, user, functionality, license, interface, menu,
shortcuts, icon, distributed, notice, trademark, platform, intellectual property, documentation, distributing, appointment,
discount, competes, desktop, entity, distribute, personnel, unbiased, display, network, boot, successor
COUNSEL: [*1] Philip Beck, Renata B. Hesse, Jacqueline S. Kelley, Mary Jean Moltenbrey, U.S. DEPARTMENT
OF JUSTICE, Washington, DC, for UNITED STATES OF AMERICA, plaintiff.
Phillip R. Malone, U.S. DEPARTMENT OF JUSTICE, San Francisco, CA, for UNITED STATES OF AMERICA,
Steven F. Benz, KELLOGG, HUBER, HANSEN, TODD, & EVANS, PLLC, Washington, DC, for CALIFORNIA
Jeffrey Blumenfeld, GRAY CARY WARE & FREIDENRICH, Washington, Dc, for NETACTION AND COMPUTER
PROFESSIONALS FOR SOCIAL RESPONSIBILITY, movant.
Jay Ward Brown, LEVINE SULLIVAN & KOCH, LLP, Washington, DC, for CABLE NEWS NETWORK, LP, LLP,
DOW JONES & COMPANY, INC., LOS ANGELES TIMES, THE ASSOCIATED PRESS, THE WASHINGTON
POST, USA TODAY, movants.
Donald L. Flexner, BOIES, SCHILLER & FLEXNER LLP, Washington, DC, for SBC COMMUNICATIONS INC.,
Judith L. Harris, REED SMITH LLP, Wsahington, DC, for NOVELL, INC., movant.
Michael Lenett, THE CUNEO LAW GROUP, Washington, DC, for THE AMERICAN ANTITRUST INSTITUTE,
Bradley S. Lui, MORRISON & FOERSTER, LLP, Jason M. Mahler, COMPUTER & COMMUNICATIONS INDUSTRY ASSOCIATION, Washington, DC, for THE COMPUTER & COMMUNICATIONS [*2] INDUSTRY ASSOCIATION, movant.
Glenn B. Manishin, KELLEY DRYE & WARREN LLP, Washington, DC, for SOFTWARE & INFORMATION INDUSTRY ASSOCIATION, movant.
Aileen Meyer, Washington, Dc, for SAN JOSE MERCURY NEWS, INC., movant.
Peter Peckarsky, Washington, DC, for RELPROMAX ANTITRUST INC., movant.
Gene C. Schaerr, SIDLEY AUSTIN BROWN & WOOD LLP, Washington, DC, for THE ASSOCIATION FOR COMPETITIVE TECHNOLOGY, movant.
Kenneth W. Starr, KIRKLAND & ELLIS, Washington, DC, for PROCOMP, movant.
Brendan V. Sullivan, Jr., WILLIAMS & CONNOLLY LLP, Washington, DC, for DISTRICT OF COLUMBIA, STATE
OF CALIFORNIA, STATE OF CONNECTICUT, STATE OF FLORIDA, STATE OF IOWA, STATE OF KANSAS,
STATE OF MASSACHUSETTS, STATE OF MINNESOTA, STATE OF UTAH, movants.
James S. Turner, SWANKIN & TURNER, Washington, DC, for CONSUMERS FOR COMPUTING CHOICE AND
OPEN PLATFORM WORKING GROUP, FREE SOFTWARE FOUNDATION, ANDREAS POUR, DAN KEGEL,
JOHN CARROLL, MASON THOMAS, movants.
Jay L. Himes, NEW YORK DEPARTMENT OF LAW, New York, NY, for COMMONWEALTH OF KENTUCKY,
STATE OF ILLINOIS, STATE OF LOUISIANA, STATE OF MARYLAND, STATE OF MICHIGAN, STATE OF
NEW YORK, STATE OF NORTH CAROLINA, STATE OF [*3] OHIO, intervenor-plaintiffs.
Steven L. Holley, Richard J. Uroksky, John L. Warden, SULLIVAN & CROMWELL, New York, NY, for MICROSOFT CORPORATION, defendant.
William H. Neukom, MICROSOFT CORPORATION, Redmond, WA, for MICROSOFT CORPORATION, defendant.
Bradley Paul Smith, SULLIVAN & CROMWELL, Washington, DC, for MICROSOFT CORPORATION, defendant.
JUDGES: COLLEEN KOLLAR-KOTELLY, United States District Judge.
OPINION BY: COLLEEN KOLLAR-KOTELLY
(November 03, 2002)
WHEREAS, plaintiffs United States of America ("United States") and the States of New York, Ohio, Illinois, Kentucky,
Louisiana, Maryland, Michigan, North Carolina and Wisconsin and defendant Microsoft Corporation ("Microsoft"), by
their respective attorneys, have consented to the entry of this Final Judgment;
AND WHEREAS, this Final Judgment does not constitute any admission by any party regarding any issue of fact or
AND WHEREAS, Microsoft agrees to be bound by the provisions of this Final Judgment pending its approval by the
NOW THEREFORE, upon remand from the United States Court of Appeals for the District of Columbia Circuit, and
upon the consent of the aforementioned [*4] parties, it is hereby ORDERED, ADJUDGED, AND DECREED:
This Court has jurisdiction of the subject matter of this action and of the person of Microsoft.
This Final Judgment applies to Microsoft and to each of its officers, directors, agents, employees, subsidiaries, succes-
sors and assigns; and to all other persons in active concert or participation with any of them who shall have received actual notice of this Final Judgment by personal service or otherwise.
III. Prohibited Conduct
A. Microsoft shall not retaliate against an OEM by altering Microsoft’s commercial relations with that OEM, or by
withholding newly introduced forms of non-monetary Consideration (including but not limited to new versions of existing forms of non-monetary Consideration) from that OEM, because it is known to Microsoft that the OEM is or is contemplating:
1. developing, distributing, promoting, using, selling, or licensing any software that competes with Microsoft Platform Software or
any product or service that distributes or promotes any Non-Microsoft Middleware;
2. shipping a Personal Computer that (a) includes both a Windows [*5] Operating System Product and a non-Microsoft Operating
System, or (b) will boot with more than one Operating System; or
3. exercising any of the options or alternatives provided for under this Final Judgment.
Nothing in this provision shall prohibit Microsoft from enforcing any provision of any license with any OEM or any intellectual property right that is not inconsistent with this Final Judgment. Microsoft shall not terminate a Covered
OEM’s license for a Windows Operating System Product without having first given the Covered OEM written notice of
the reasons for the proposed termination and not less than thirty days’ opportunity to cure. Notwithstanding the foregoing, Microsoft shall have no obligation to provide such a termination notice and opportunity to cure to any Covered
OEM that has received two or more such notices during the term of its Windows Operating System Product license.
Nothing in this provision shall prohibit Microsoft from providing Consideration to any OEM with respect to any
Microsoft product or service where that Consideration is commensurate with the absolute level or amount of that
OEM’s development, distribution, promotion, or licensing [*6] of that Microsoft product or service.
B. Microsoft’s provision of Windows Operating System Products to Covered OEMs shall be pursuant to uniform license agreements with uniform terms and conditions. Without limiting the foregoing, Microsoft shall charge each Covered OEM the applicable royalty for Windows Operating System Products as set forth on a schedule, to be established
by Microsoft and published on a web site accessible to the Plaintiffs and all Covered OEMs, that provides for uniform
royalties for Windows Operating System Products, except that:
1. the schedule may specify different royalties for different language versions;
2. the schedule may specify reasonable volume discounts based upon the actual volume of licenses of any Windows Operating System Product or any group of such products; and
3. the schedule may include market development allowances, programs, or other discounts in connection with Windows Operating
System Products, provided that:
a. such discounts are offered and available uniformly to all Covered OEMs, except that Microsoft may establish
one uniform discount schedule for the ten largest Covered OEMs and a second uniform discount [*7] schedule
for the eleventh through twentieth largest Covered OEMs, where the size of the OEM is measured by volume of
b. such discounts are based on objective, verifiable criteria that shall be applied and enforced on a uniform basis
for all Covered OEMs; and
c. such discounts or their award shall not be based on or impose any criterion or requirement that is otherwise inconsistent with any portion of this Final Judgment.
C. Microsoft shall not restrict by agreement any OEM licensee from exercising any of the following options or alternatives:
1. Installing, and displaying icons, shortcuts, or menu entries for, any Non-Microsoft Middleware or any product or service (including but not limited to IAP products or services) that distributes, uses, promotes, or supports any Non-Microsoft Middleware,
on the desktop or Start menu, or anywhere else in a Windows Operating System Product where a list of icons, shortcuts, or menu
entries for applications are generally displayed, except that Microsoft may restrict an OEM from displaying icons, shortcuts and
menu entries for any product in any list of such icons, shortcuts, or menu entries specified in the [*8] Windows documentation as
being limited to products that provide particular types of functionality, provided that the restrictions are non-discriminatory with respect to non-Microsoft and Microsoft products.
2. Distributing or promoting Non-Microsoft Middleware by installing and displaying on the desktop shortcuts of any size or shape
so long as such shortcuts do not impair the functionality of the user interface.
3. Launching automatically, at the conclusion of the initial boot sequence or subsequent boot sequences, or upon connections to or
disconnections from the Internet, any Non-Microsoft Middleware if a Microsoft Middleware Product that provides similar functionality would otherwise be launched automatically at that time, provided that any such Non-Microsoft Middleware displays on
the desktop no user interface or a user interface of similar size and shape to the user interface displayed by the corresponding
Microsoft Middleware Product.
4. Offering users the option of launching other Operating Systems from the Basic Input/ Output System or a non-Microsoft bootloader or similar program that launches prior to the start of the Windows Operating System Product.
5. [*9] Presenting in the initial boot sequence its own IAP offer provided that the OEM complies with reasonable technical specifications established by Microsoft, including a requirement that the end user be returned to the initial boot sequence upon the conclusion of any such offer.
6. Exercising any of the options provided in Section III.H of this Final Judgment.
D. Starting at the earlier of the release of Service Pack 1 for Windows XP or 03 months after the submission of this Final Judgment to the Court, Microsoft shall disclose to ISVs, IHVs, IAPs, ICPs, and OEMs, for the sole purpose of interoperating with a Windows Operating System Product, via the Microsoft Developer Network ("MSDN") or similar
mechanisms, the APIs and related Documentation that are used by Microsoft Middleware to interoperate with a
Windows Operating System Product. For purposes of this Section III.D, the term APIs means the interfaces, including
any associated callback interfaces, that Microsoft Middleware running on a Windows Operating System Product uses to
call upon that Windows Operating System Product in order to obtain any services from that Windows Operating System
Product. In the case of a new [*10] major version of Microsoft Middleware, the disclosures required by this Section III.D shall occur no later than the last major beta test release of that Microsoft Middleware. In the case of a new version
of a Windows Operating System Product, the obligations imposed by this Section III.D shall occur in a Timely Manner.
E. Starting nine months after the submission of this proposed Final Judgment to the Court, Microsoft shall make available for use by third parties, for the sole purpose of inter-operating or communicating with a Windows Operating System Product, on reasonable and non-discriminatory terms (consistent with Section III.I), any Communications Protocol
that is, on or after the date this Final Judgment is submitted to the Court, (i) implemented in a Windows Operating System Product installed on a client computer, and (ii) used to interoperate, or communicate, natively (i.e., without the addition of software code to the client operating system product) with a Microsoft server operating system product.
F. 1 Microsoft shall not retaliate against any ISV or IHV because of that ISV’s or IHV’s:
a. developing, using, distributing, promoting or supporting [*11] any software that competes with Microsoft
Platform Software or any software that runs on any software that competes with Microsoft Platform Software,
b. exercising any of the options or alternatives provided for under this Final Judgment.
2. Microsoft shall not enter into any agreement relating to a Windows Operating System Product that conditions the grant of any
Consideration on an ISV’s refraining from developing, using, distributing, or promoting any software that competes with Microsoft
Platform Software or any software that runs on any software that competes with Microsoft Platform Software, except that
Microsoft may enter into agreements that place limitations on an ISV’s development, use, distribution or promotion of any such
software if those limitations are reasonably necessary to and of reasonable scope and duration in relation to a bona fide contractual
obligation of the ISV to use, distribute or promote any Microsoft software or to develop software for, or in conjunction with,
3. Nothing in this section shall prohibit Microsoft from enforcing any provision of any agreement with any ISV or IHV, or any intellectual property right, that is [*03] not inconsistent with this Final Judgment.
G. Microsoft shall not enter into any agreement with:
1. any IAP, ICP, ISV, IHV or OEM that grants Consideration on the condition that such entity distributes, promotes, uses, or supports, exclusively or in a fixed percentage, any Microsoft Platform Software, except that Microsoft may enter into agreements in
which such an entity agrees to distribute, promote, use or support Microsoft Platform Software in a fixed percentage whenever
Microsoft in good faith obtains a representation that it is commercially practicable for the entity to provide equal or greater distribution, promotion, use or support for software that competes with Microsoft Platform Software, or
2. any IAP or ICP that grants placement on the desktop or elsewhere in any Windows Operating System Product to that IAP or ICP
on the condition that the IAP or ICP refrain from distributing, promoting or using any software that competes with Microsoft Middleware.
Nothing in this section shall prohibit Microsoft from entering into (a) any bona fide joint venture or (b) any joint development or joint services arrangement with any ISV, IHV, IAP, ICP, or OEM [*13] for a new product, technology or service, or any material value-add to an existing product, technology or service, in which both Microsoft and the ISV, IHV,
IAP, ICP, or OEM contribute significant developer or other resources, that prohibits such entity from competing with the
object of the joint venture or other arrangement for a reasonable period of time.
This Section does not apply to any agreements in which Microsoft licenses intellectual property in from a third party.
H. Starting at the earlier of the release of Service Pack 1 for Windows XP or 03 months after the submission of this Final Judgment to the Court, Microsoft shall:
1. Allow end users (via a mechanism readily accessible from the desktop or Start menu such as an Add/ Remove icon) and OEMs
(via standard preinstallation kits) to enable or remove access to each Microsoft Middleware Product or Non-Microsoft Middleware
Product by (a) displaying or removing icons, shortcuts, or menu entries on the desktop or Start menu, or anywhere else in a
Windows Operating System Product where a list of icons, shortcuts, or menu entries for applications are generally displayed, except that Microsoft may restrict the [*14] display of icons, shortcuts, or menu entries for any product in any list of such icons,
shortcuts, or menu entries specified in the Windows documentation as being limited to products that provide particular types of
functionality, provided that the restrictions are non-discriminatory with respect to non-Microsoft and Microsoft products; and (b)
enabling or disabling automatic invocations pursuant to Section III.C.3 of this Final Judgment that are used to launch Non-Microsoft Middleware Products or Microsoft Middleware Products. The mechanism shall offer the end user a separate and unbiased
choice with respect to enabling or removing access (as described in this subsection III.H.1) and altering default invocations (as described in the following subsection III.H.2) with regard to each such Microsoft Middleware Product or Non-Microsoft Middleware
Product and may offer the end-user a separate and unbiased choice of enabling or removing access and altering default configurations as to all Microsoft Middleware Products as a group or all Non-Microsoft Middleware Products as a group.
2. Allow end users (via an unbiased mechanism readily available from the desktop or Start menu), OEMs [*15] (via standard OEM
preinstallation kits), and Non-Microsoft Middleware Products (via a mechanism which may, at Microsoft’s option, require confirmation from the end user in an unbiased manner) to designate a Non-Microsoft Middleware Product to be invoked in place of that
Microsoft Middleware Product (or vice versa) in any case where the Windows Operating System Product would otherwise launch
the Microsoft Middleware Product in a separate Top-Level Window and display either (i) all of the user interface elements or (ii)
the Trademark of the Microsoft Middleware Product.
Notwithstanding the foregoing Section III.H.2, the Windows Operating System Product may invoke a Microsoft
Middleware Product in any instance in which:
(a) that Microsoft Middleware Product would be invoked solely for use in interoperating with a server maintained by Microsoft (outside the context of general Web browsing), or
(b) that designated Non-Microsoft Middleware Product fails to implement a reasonable technical requirement
(e.g., a requirement to be able to host a particular ActiveX control) that is necessary for valid technical reasons to
supply the end user with functionality consistent [*16] with a Windows Operating System Product, provided
that the technical reasons are described in a reasonably prompt manner to any ISV that requests them.
3. Ensure that a Windows Operating System Product does not (a) automatically alter an OEM’s configuration of icons, shortcuts or
menu entries installed or displayed by the OEM pursuant to Section III.C of this Final Judgment without first seeking confirmation
from the user and (b) seek such confirmation from the end user for an automatic (as opposed to user-initiated) alteration of the
OEM’s configuration until 14 days after the initial boot up of a new Personal Computer. Any such automatic alteration and confirmation shall be unbiased with respect to Microsoft Middleware Products and Non-Microsoft Middleware. Microsoft shall not alter the manner in which a Windows Operating System Product automatically alters an OEM’s configuration of icons, shortcuts or
menu entries other than in a new version of a Windows Operating System Product.
Microsoft’s obligations under this Section III.H as to any new Windows Operating System Product shall be determined
based on the Microsoft Middleware Products which exist seven months prior [*17] to the last beta test version (i.e., the
one immediately preceding the first release candidate) of that Windows Operating System Product.
I. Microsoft shall offer to license to ISVs, IHVs, IAPs, ICPs, and OEMs any intellectual property rights owned or licensable by Microsoft that are required to exercise any of the options or alternatives expressly provided to them under
this Final Judgment, provided that
1. all terms, including royalties or other payment of monetary consideration, are reasonable and non-discriminatory;
2. the scope of any such license (and the intellectual property rights licensed thereunder) need be no broader than is necessary to
ensure that an ISV, IHV, IAP, ICP or OEM is able to exercise the options or alternatives expressly provided under this Final Judgment (e.g., an ISV’s, IHV’s, IAP’s, ICP’s and OEM’s option to promote Non-Microsoft Middleware shall not confer any rights to
any Microsoft intellectual property rights infringed by that Non-Microsoft Middleware);
3. an ISV’s, IHV’s, IAP’s, ICP’s, or OEM’s rights may be conditioned on its not assigning, transferring or sublicensing its rights un-
der any license granted under this [*18] provision; and
4. the terms of any license granted under this section are in all respects consistent with the express terms of this Final Judgment.
Beyond the express terms of any license granted by Microsoft pursuant to this section, this Final Judgment does not, directly or by implication, estoppel or otherwise, confer any rights, licenses, covenants or immunities with regard to any
Microsoft intellectual property to anyone.
J. No provision of this Final Judgment shall:
1. Require Microsoft to document, disclose or license to third parties: (a) portions of APIs or Documentation or portions or layers
of Communications Protocols the disclosure of which would compromise the security of a particular installation or group of installations of anti-piracy, anti-virus, software licensing, digital rights management, encryption or authentication systems, including
without limitation, keys, authorization tokens or enforcement criteria; or (b) any API, interface or other information related to any
Microsoft product if lawfully directed not to do so by a governmental agency of competent jurisdiction.
2. Prevent Microsoft from conditioning any license of any API, [*19] Documentation or Communications Protocol related to antipiracy systems, anti-virus technologies, license enforcement mechanisms, authentication/ authorization security, or third party intellectual property protection mechanisms of any Microsoft product to any person or entity on the requirement that the licensee: (a)
has no history of software counterfeiting or piracy or willful violation of intellectual property rights, (b) has a reasonable business
need for the API, Documentation or Communications Protocol for a planned or shipping product, (c) meets reasonable, objective
standards established by Microsoft for certifying the authenticity and viability of its business, (d) agrees to submit, at its own expense, any computer program using such APIs, Documentation or Communication Protocols to third-party verification, approved
by Microsoft, to test for and ensure verification and compliance with Microsoft specifications for use of the API or interface,
which specifications shall be related to proper operation and integrity of the systems and mechanisms identified in this paragraph.
IV. Compliance and Enforcement Procedures
A. Enforcement Authority
1. [*20] The Plaintiffs shall have exclusive responsibility for enforcing this Final Judgment. Without in any way limiting the sovereign enforcement authority of each of the plaintiff States, the plaintiff States shall form a committee to coordinate their enforcement of this Final Judgment. A plaintiff State shall take no action to enforce this Final Judgment without first consulting with the
United States and with the plaintiff States’ enforcement committee.
2. To determine and enforce compliance with this Final Judgment, duly authorized representatives of the United States and the
plaintiff States, on reasonable notice to Microsoft and subject to any lawful privilege, shall be permitted the following:
a. Access during normal office hours to inspect any and all source code, books, ledgers, accounts, correspondence, memoranda and other documents and records in the possession, custody, or control of Microsoft, which
may have counsel present, regarding any matters contained in this Final Judgment.
b. Subject to the reasonable convenience of Microsoft and without restraint or interference from it, to interview,
informally or on the record, officers, employees, or agents of Microsoft, [*21] who may have counsel present,
regarding any matters contained in this Final Judgment.
c. Upon written request of the United States or a duly designated representative of a plaintiff State, on reasonable
notice given to Microsoft, Microsoft shall submit such written reports under oath as requested regarding any
matters contained in this Final Judgment.
Individual plaintiff States will consult with the plaintiff States’ enforcement committee to minimize the duplication and burden of the exercise of the foregoing powers, where practicable.
3. The Plaintiffs sh…