A U.S. court today overturned an injunction that prevented Microsoft Corp. from requiring computer makers that use its Windows 95 operating system to also use its Internet Explorer Web browser.
The U.S. Court of Appeals for the District of Columbia in a 2-1 decision ruled that a lower court made both procedural and substantive errors in imposing the injunction.
The U.S. Department of Justice said that it is disappointed with the appellate court decision and is reviewing its options. "We remain confident that the evidence and our legal arguments in our antitrust case filed on May 18, 1998, will demonstrate that Microsoft's conduct has violated federal antitrust laws," the agency said in a statement.
The May lawsuit, filed in tandem with lawsuits by attorney generals in 20 states, argues that Microsoft is using its dominance in the operating system market to unfairly gain advantage in the browser and Internet market by bundling its Internet Explorer browser with Windows 98.
Microsoft predicted that today's decision would affect the outcome of the broader case involving Windows.
"This is a great day for consumers. Today's decision affirms the central principle Microsoft has been defending that every company should have the freedom to improve its products and integrate new features on behalf of consumers," the company said in a statement. "Both of the government's lawsuits are based on the same argument rejected today by the appeals court that Internet Explorer is separate from Windows, so we believe today's ruling will be very helpful to provide guidance to resolve the Window 98 lawsuit."
The appeals court also granted a Microsoft request that it require the district court to revoke or revise its assignment of the matter of a permanent injunction to a special consultant to the court, dubbed "special master."
"We find that the district court erred procedurally in entering a preliminary injunction without notice to Microsoft," according to the majority opinion published today on the court's Web site.
District Judge Thomas Penfield Jackson also erred "substantively" is his reading of a 1995 consent decree between Microsoft and the Department of Justice, according to the appeals court.
The appeals court said the union of Windows 95 and Explorer is "a genuine integration" and Microsoft is not prevented from offering the browser as an integrated product.
"On the facts before us, Microsoft has clearly met the burden of ascribing facially plausible benefits to its integrated design as compared to an operating system combined with a stand-alone browser such as Netscape's Navigator," today's opinion read in part.
The decision throws out Judge Jackson's Dec. 11 District Court injunction, which ordered Microsoft to stop the practice of licensing the use of its "operating system software [including Windows 95 or any successor version thereof] on the condition, express or implied, that the licensee also license and preinstall any Microsoft Internet browser software."
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