WASHINGTON — Microsoft Corp. suffered a serious defeat Friday in its antitrust battle when a federal judge declared that Bill Gates' software empire holds a monopoly and had aggressively used that power by "stifling innovation" by rivals.
U.S. District Judge Thomas Penfield Jackson concluded: "Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft's core products."
The 207-page findings of facts in the case are not a final ruling, but they side heavily with the government's position in the case and are the strongest sign yet that Microsoft could lose the case, if it does not settle first.
But the antitrust case is far from over. The final decision in the case and any penalties are not likely until early next year. Appeals could also drag out the case for years and eventually put it before the Supreme Court.
A central issue in the trial was Microsoft's monopoly on personal computer operating systems and its ability to bundle other programs with it.
Jackson has said he hopes his findings of fact will spur Microsoft and the government to settle their differences out of court.
"Certainly there's got to be a way to resolve this that is fair to Microsoft and is fair to consumers," Gates said Friday after the ruling.
At a news conference in Redmond, Wash., Gates, the richest man in the world, said that Microsoft has done nothing wrong.
"Microsoft competes fairly and vigorously," he said.
In Washington, a confident Joel I. Klein, assistant attorney general for antitrust, said the government remained open to a settlement with Microsoft. But Connecticut Atty. Gen. Richard Blumenthal indicated the 19 states that joined the case, including his own, are likely to be more hard-nosed in the wake of Judge Jackson's decision.
These are "very compelling and powerful findings, picturing a predator [Microsoft] that has misued monopoly power," Blumenthal said. "It should lead to serious and far-reaching remedies."
The landmark trial strikes at the heart of technology that is fast transforming the Information Age. Nearly 40 million American households are now online, according to Forrester Research in Cambridge, Mass. And software such as Internet Web browsers and online chat applications are becoming as commonplace as microwave ovens and fax machines.
