The Department of Justice and nineteen U. states filed an antitrust case against Microsoft on May 18, 1998. The Department of Justice charged Microsoft with two violations of Section Two of the Sherman Act for illegally protecting and extending the Windows software monopoly. A third charge for a violation for illegal business practices under Section One of the act was also made. The group proclaimed that Microsoft abused monopoly power in its handling of operating system sales and web browser sales (Wilke 1999).
On November 5, 1999, US District Court Judge Thomas Penfield Jackson issued his findings of fact, finding that Microsoft had "monopoly power and used it to harm consumers, rivals, and other companies (Wired 2002)."" .
On April 3, 2000, in a two-part decision, Judge Thomas Penfield Jackson ruled in Washington, D.C. that Microsoft's dominance of the personal computer operating systems market constituted a monopoly, and that it used its power against competitors in ways that stifled innovation and harmed consumers. Judge Jackson ordered the breakup of Microsoft into two separate units, one to produce the operating system, and one to produce other software components (Wilke 1999). .
Judge Jackson's remedy was overturned on appeal on the grounds that interviews he gave to the news media during the case prove a personal bias. Judge Jackson disputes these charges. Jackson's findings of fact, however, remain substantially unchanged. .
The Department of Justice, now under the administration of President George W. Bush, announced on September 6, 2001 that it was no longer seeking to break-up Microsoft, and would instead seek a lesser antitrust penalty. Then on November 2, 2001, the Department of Justice agreed with Microsoft to settle the case. Nine States and the District of Columbia, which had been pursuing the case along with the Department of Justice, did not agree with the settlement, arguing that it did not go far enough to stop or slow down Microsoft's anti-competitive business practices.