In yet another setback for Microsoft, Jackson issues a sternly worded order denying a motion to disqualify special master Lawrence Lessig from the case. Analysts and court observers suggest that the company's aggressive legal tactics may be backfiring, which may lead the jurist to side with the government on some pivotal issues. Lessig, meanwhile, insists on his impartiality in a sworn declaration.
Later in the month, the Justice Department and Microsoft announce a settlement where the company agrees to immediately provide computer vendors with the most up-to-date version of Windows 95 without the desktop icon for Internet Explorer, resolving the hotly contested contempt issue. Microsoft's appeal of Jackson's preliminary injunction is still pending, however.
CEO Bill Gates says Microsoft settled its contempt-of-court charges partly because of the press ridicule it endured after offering a crippled version of Windows to satisfy a court order. Attention once again is turning to the open-ended and high-stakes question of what antitrust action will mean for Windows 98.
Eleven state attorneys general subpoena Microsoft for documents relating to its upcoming release of Windows 98. In addition, the appointment of special master Lessig is suspended by a federal appeals court, pending further review.
Gates agrees to appear at a Senate Judiciary Committee hearing on competition in the computer industry headed by Sen. Orrin Hatch (R-Utah), who has been critical of Microsoft's business practices. Hatch also invites Netscape chief Jim Barksdale and Sun Microsystems CEO Scott McNealy.
A Texas judge dismisses a suit in which the state's attorney general accused Microsoft of illegally interfering with an ongoing investigation into the software giant's business practices.
Antitrust enforcers appear to be blanketing the Internet provider industry with subpoenas, searching for evidence that Microsoft is using its dominance in PC operating systems to corner new markets created by the Net. Online providers America Online, MCI Communications, EarthLink Network, and Sprint all confirm they have received subpoenas.
Following a face-to-face meeting between state attorneys general and Justice Department officials in San Francisco about possibly joining forces against the software giant, 27 states file a brief in federal appeals court in Washington supporting the Justice Department's antitrust case against Microsoft.
Gates tells a packed Senate Judiciary Committee hearing on competition in the computer industry that "technology is ever-changing," pointing to his company's ability to leapfrog IBM as a reason why Microsoft should not be held to antitrust laws applicable specifically to companies that overwhelmingly dominate their industries. Chief executives Barksdale of Netscape and McNealy of Sun disagree, saying Microsoft must be held to a different standard because it is a monopolist.
Microsoft quietly backs away from some of the deals that drew much of the government's scrutiny in the first place, dropping restrictions involving its Internet Explorer browser with computer makers, content providers, and ISPs. Redmond executives say they are not reacting to any government pressure and that decisions on any IE promotional deals are routine--and routinely changed.
DOJ regulators send out another round of civil subpoenas as they return their attention to computer makers in their investigation of Microsoft. Moreover, sources add the Justice Department is looking at other issues as well, including the marketing of Windows NT, Microsoft's actions in the Java market, and its partnerships with Internet content providers.
Microsoft modifies hundreds of contracts with content companies worldwide to remove provisions that limit their ability to promote browsers made by competitors such as Netscape. The contracts dictate terms content providers must adhere to in order to be placed on Microsoft's Active Channel Bar. Later in the month, the company gives computer makers the option of shipping a version of Windows 98 that hides the controversial Active Channel Bar.
Turning up the political heat on Microsoft, conservatives Bob Dole and Robert Bork announce a group--which includes players outside the technology industry, as well as Redmond rivals Netscape and Sun--to lobby against the software giant for allegedly anticompetitive practices.
In federal appeals court, Microsoft continues to hold its ground by arguing that in issuing a preliminary injunction separating the company's Web browser from Windows 95, Judge Jackson overstepped his legal authority. The Justice Department counters that the judge had "inherent authority" to make his ruling. The three-judge panel gives no indication as to when it might release a ruling.
In a surprise announcement, Texas's attorney general, once a lead investigator, says he is rethinking taking any antitrust action against Microsoft. The news follows lobbying by Texas computer sellers who warn that a lawsuit could be bad for their businesses.
Despite the lobbying efforts by Microsoft and its allies, the Justice Department and 20 states file suit in federal court in Washington. The two suits--one filed by the Justice Department and the other filed by the states--largely take aim at alleged anticompetitive actions by Microsoft against Netscape. Both suits also discuss Microsoft's business practices, such as its plan to compete against Sun Microsystems' Java programming language. The suits eventually are consolidated and the trial is set for September 8.
A federal appeals court unanimously overturns a lower court's order that had required Microsoft to offer its Internet Explorer browser separately from Windows 95. The ruling challenges a key legal theory that Microsoft is illegally tying IE to Windows 98.
The government then increasingly emphasizes allegations extending beyond the browser market. Both sides begin to wrangle about details surrounding the case, including what evidence should be introduced and when the trial should start. At the urging of both sides, the judge delays start of trial--three times.
The government adds new allegations concerning Java and other technologies that may threaten Microsoft, including media software made by Apple Computer and instructions for chips made by Intel. Microsoft accuses the government of trying to "ambush" it weeks before trial is to start. Judge Jackson denies Microsoft's motion to dismiss the case.
In a court filing, the government says it intends to call two new witnesses: Sun cofounder James Gosling and Apple software executive Avadis Tevanian. Microsoft repeatedly criticizes the government for allegedly rewriting its original case. The software giant asks for an additional delay in the trial and is denied.
Testimony phase of the landmark trial begins. (See main page of our special coverage for full details.)