Microsoft countered that innovation and competition were not unlawful, and that the browser and the operating system were inseparable as the browser was not a separate product but a feature of the operating system. Microsoft purported to demonstrate this in court by showing a video of the sluggish performance and increase in errors that would occur if the browser was removed from the product.
The DOJ submitted evidence to show that the browser and operating system were separable. They also pointed out that it was possible to obtain a standalone version of the browser, for example for the Macintosh operating system.
Although Microsoft argued that the browser was being provided free, the DOJ adduced that the costs of the browser’s development were incorporated into the cost of the operating system, and was partly responsible for the relatively high cost of the operating system.
Microsoft further argued that the fact that the industry was unregulated had meant faster development, lower prices and more choice for consumers. This argument was echoed by other commentators (see Browne, 2001). However the manner in which the browser is integrated with the operating system means that even when a consumer prefers to use an alternative product the default browser would be Microsoft’s. It was not possible for the consumer to backward engineer this, firstly because of the restrictions in the end user license agreement and secondly because most consumers would not know how to go about doing so. Hence in reality they were being forced to use Microsoft’s browser whether they wished to or not (Chin, 2004).
Judge Thomas Penfield Jackson held that Microsoft were in breach of both sections 1 and 2 of the Sherman Anti-Trust Act and ordered that Microsoft should separate the browser and other applications from the operating system. However Microsoft appealed and Judge Jackson’s decision was overturned by the DC Circuit Court of Appeals on the basis that since the Judge had given media interviews he had not retained his objectivity. The DC Circuit Court of Appeal remanded the case to be reheard on a reduced scope of liability.
Ultimately the DOJ and Microsoft agreed to a settlement whereby Microsoft would provide its Application Programming Interfaces (APIs) to third parties and set up a Technical Committee of 3 persons to oversee this for compliance. Despite opposition that this was no more than a slap on the wrist, the US Appeals court unanimously accepted this settlement and Judge Colleen Kollar-Kotelly directions. In an interview after the ruling a disappointed Massachusetts Attorney General Thomas F. Reilly said Microsoft "not only has been ruled a monopolist, they are now a protected monopolist. That’s a very dangerous thing." Reilly said the case demonstrates that "our antitrust laws are not effective in protecting consumers," especially in the realm of high technology (quoted in Krim, 2004)
All software companies benefit from Microsoft’s ‘victory’ to the consumer’s

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