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Business Law Antitirust

d on the merits. Because Microsoft achieved this result through exclusionary acts the Court considered Microsoft's conduct to be the maintenance of monopoly power by anti-competitive means. Section 1 of the Sherman Act prohibits "every contract, combination . . . , or conspiracy, in restraint of trade or commerce . . . ." 15 U.S.C. 1. Pursuant to this statute, courts have condemned commercial stratagems that constitute unreasonable restraints on competition. The unreasonable restraints on competition in the charges against Microsoft amounted to "tying arrangements" and "exclusive dealing" contracts. Tying arrangements are defined as unlawful when sellers exploit their market power over one product to force unwilling buyers into acquiring another. The courts have condemned as unlawful exclusive dealing only those contractual arrangements that substantially shutdown competition in a relevant market by significantly reducing the number of outlets a competitor has to reach prospective consumers of his product. Liability for tying under Section One consists of: (1) two separate "products" are involved; (2) the defendant gives its customers no choice but to take the tied product in order to obtain the tying product; (3) the arrangement affects a substantial volume of interstate commerce; and (4) the defendant has "market power" in the tying product market. All four elements are required to determine a violation. The plaintiffs alleged that Microsoft's combination of Windows and Internet Explorer by contractual and technological means constituted unlawful tying to the extent that Microsoft's customers and consumers were forced to take Internet Explorer in order to get Windows. Microsofts position was that the tied and tying products were in reality only a single product. The Court agreed with the plaintiffs, and found that Microsoft is liable for illegal tying under Section One. Plaintiffs also called Microsofts contractual agreements...

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