Justice Dept. Conference
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JANET RENO, Attorney General: Good afternoon. As you know, the court has just announced its remedy in the Microsoft case. I’m pleased that the court has ordered a strong, effective remedy to address the serious antitrust violations that Microsoft has committed.
The court’s remedy strikes the right balance. The structural remedy will stimulate competition that will have a lasting impact on this important industry, and the interim conduct relief will ensure that Microsoft cannot break the law while the structural provisions are taking effect.
Today’s ruling will have a profound impact not only by promoting competition in the software industry, but also by reaffirming the importance of antitrust law enforcement in the 21st century and the importance of competition. I am so very proud of all of the hard work and efforts of this team, with the remarkable trial work of David Boies and Phil Malone, all the other attorneys from the San Francisco field office, the paralegals, the computer technicians and others.
Joel, your team has demonstrated once again that the Department of Justice can meet any challenge in discharging our duties to enforce the law, and it’s a great feeling. Your efforts will protect competition and ensure that consumers have more choices and improved products in the marketplace.
I also want to tell the attorneys general how happy I am you are here today. Tom Miller and Dick Blumenthal are representing the State Attorneys General, who have worked so well and so tirelessly on this case. The cooperation of federal and state law enforcement has been superb. And, Joel, thank you for your leadership, your vision, your absolute determination, which have provided the American people with an outstanding example of the legal system at its best.
JOEL KLEIN, Asst. Attorney General: Good afternoon. First, let me thank you, Attorney General Reno, for your comments and for your unwavering support and leadership throughout this entire case.
The court’s order today is the right remedy for Microsoft’s serious and repeated violations of the antitrust laws. It will stimulate competition in the PC operating system market and throughout the entire computer industry.
When the remedy is implemented — and this is the key point — customers, consumers, in a free and competitive marketplace, will decide for themselves what software they want to purchase. Neither a monopolist nor the government will dictate that choice. The court had an extraordinary record upon which to enter today’s order.
Judge Jackson had this case before him from the — more than two years. He heard all the testimony and arguments, and reviewed thousands and thousands of documents during a 78-day trial. He carefully weighed the evidence and made extraordinarily detailed findings of fact. He analyzed the legal precedents and issued lengthy conclusions of law.
He found that Microsoft had repeatedly abused its monopoly power and violated law by crushing emerging threats to Windows’ dominance and, specifically, by increasing the barriers to entry into the PC operating system market. The remedy the court ordered — breaking Microsoft into an operating systems company and an applications company — is fair, and it’s measured.
Indeed, it directly flows from the extensive findings and legal conclusions that the courts had previously entered. That’s what the law requires, and that’s what Judge Jackson did.
Sustained abuse of monopoly power is among the most serious and most damaging of all antitrust violations, since it eliminates the competition that creates innovation and choice in the marketplace.
Microsoft repeatedly used its operating system monopoly to eliminate threats posed by cross-platform software products, cross-platform products that would have essentially allowed other operating systems to compete with Windows.
The divestiture will give the applications company every incentive to develop precisely those kinds of cross-platform products on its own and to make the key office productivity suite available for other operating systems. All of this will stimulate competition and innovation.
And the interim restrictions on the operating systems company are needed to permit competition to emerge. They are narrowly tailored to prohibit Microsoft from repeating the past illegal actions. And three years after divestiture is implemented, all of the interim conduct provisions will terminate. All that will remain are provisions to stop the two companies from colluding with one another.
By then, competition, not regulation, will limit Microsoft’s power to thwart innovation. After the divestiture, I expect both companies will be vibrant, strong and successful firms. Each will be free to create new, exciting products. And they will have every incentive to compete vigorously with one another and with others in this industry. That competition will benefit America’s consumers and the entire economy.
I’m very proud of the Antitrust Division for the extraordinary work done by our entire team in assembling the evidence, presenting it to the court and preparing and submitting our remedy.
These people, starting with David Boies and Phil Malone — and David, unfortunately, could not be here today because he has trial proceedings in Florida — these people have demonstrated a fact that is forgotten all too frequently today, and that is that government service can be a noble calling in which dedicated men and women work hard, usually with little or no recognition, to enforce our country’s laws and to protect the public interest.
America is in their debt. I also want to pay tribute to my friends, Attorney General Tom Miller and Dick Blumenthal, and their colleagues in the states. They, too, are dedicated public servants, and we have worked well together to enforce the laws over these many months.
In closing, I want to stress that Microsoft itself is responsible for where things stand today. Its repeated illegal actions were the results of decisions made at the highest levels of the company over a lengthy and sustained period of time. They reflected defiance of, not respect for, the rule of law.
Today’s decision marks an important step in redressing the serious effects of Microsoft’s illegal actions, in requiring the company to obey the law.