Virtual Revolution: the Microsoft case and the web

Several people have asked me about Bill Gates and Microsoft’s role in the history of the Web in the wake of the opening programme in the Open University's new series on BBC2 on Saturday evening, The Virtual Revolution.  In particular there was interest in the legal ruling that presenter Dr Aleks Krotoski said “meant that Microsoft had had its wings clipped.”

There have actually been a series of legal disputes between Microsoft and the US government and between the software giant and the EU.  To keep things relatively simple I’ll focus here on one part of the US case relating to the Web.

By the mid 1990s when the Web hit public consciousness most web users were using a web browser called Netscape Navigator.  Then, as Dr Krotoski says, Microsoft launched its own browser, Internet Explorer, and gave it away for free with its Windows 95 operating system software.  But Microsoft didn’t just give the browser away.  PC manufacturers selling PCs with Windows 95 were obliged, under the software licence agreement, to include the Internet Explorer browser on their PCs.

This didn’t have an immediate impact on Netscape’s market share. However, as Microsoft issued improved versions of Internet Explorer and continued to insist on the bundling software licence provisions requiring PC makers to use their browser, Netscape’s position as market leader was eroded and eventually decimated. People running computers with Windows 95 quite naturally just used the user friendly browser with the convenient icon on their desktop.

Microsoft, in an earlier case with the US Department of Justice (DOJ) settled before the release of Internet Explorer, had agreed not to use its dominant market share to squash the competition.  The DOJ now felt that was exactly what the company was doing to Netscape and, along with 19 US states, in 1997 sued the company for breaking the earlier agreement and engaging in anti-competitive practices.  The case proved to be a complex and fascinating story in itself, full of dramatic courtroom revelations and characters, victories and losses for the various protagonists.

By 1999 Judge Jackson decided that Microsoft had engaged in anti-competitive behaviour that was damaging to competitors and consumers and in April the following year he issued his final ruling to that effect.  Then in June 2000 Judge Jackson ordered that Microsoft be broken into two companies.  Microsoft appealed.

In January 2001 George W. Bush ascended to the White House as the 43^rd US President and John Ashcroft took charge of the DOJ on his behalf. In June 2001 the Appeal Court reversed Judge Jackson’s breakup order.  By September the DOJ told the new judge in the case, judge Kollar-Kotelly that it was no longer seeking the breakup of the company as a penalty for its actions.  By November 2002 Judge Kollar-Kotelly approved a settlement reached by Microsoft and the DOJ and most of the states. Massachusetts fought on alone in vain until 2004.

So did Microsoft have its wings clipped as Dr Krotoski says?  Well it’s debatable and you’ll find many expert commentators on both sides of the divide on that one.  What is clear is that in 1995 Netscape was the window to the web for the masses.  By 1997, when this particular version of the Microsoft legal story began, Netscape still had the lead in the browser wars though Internet Explorer was catching up fast.  By the time the case was settled Internet Explorer was dominant and Windows XP had been launched, including the latest version of Internet Explorer.  Netscape was taken over by AOL in 1998 but effectively ceased to exist by the summer of 2003.

An edited version of this post is available on the open2.net blog.