No Split-Up for Microsoft; Other Issues Backfire | AccountingWEB

No Split-Up for Microsoft; Other Issues Backfire

The U.S. Court of Appeals for the District of Columbia has voted unanimously to overturn last year's lower court order to split Microsoft Corp. The stock market responded Thursday by sending Microsoft shares up 2.3 percent to close at $72.74. Meanwhile, shares of competitor companies including AOL Time Warner Inc., Red Hat, and RealNetworks Inc. dropped in value after the decision was made public.

The Court found that Microsoft was monopolistic in intertwining its Internet Explorer browser to the Windows operating system. Specifically, the computer code of Internet Explorer is co-mingled with the code for Windows and there is no add/remove program option in the Control Panel that applies to Internet Explorer.

The Court has ordered that a new lower court judge look at the issue of whether Microsoft illegally tied its Internet browser to the Windows operating system in order to maintain its monopoly.

The U.S. also found that Microsoft broke the law by threatening Intel Corp.

A lower court ruled last summer that Microsoft was guilty of trying to monopolize the market for Internet browsers and ordered the mega-company to be split into two companies, one that produces operating systems and another that sells software applications. It was believed that such a split would result in increased competition in the software industry.

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