A Judge Ordered Microsoft to Split. Here’s Why It’s Still a Single Company
The monopoly ruling never led to the creation of "Baby Bill" companies
It was Friday, Nov. 5, 1999 when then-Microsoft CEO Bill Gates got the bad news. Judge Thomas Penfield Jackson had declared that his company was a monopoly. And not just any monopoly, but the very worst kind: one that uses its power to squash would-be rivals before they’re even out of the gate. At the time, Microsoft packaged its Internet Explorer web browser with its Windows operating systems, which gave Microsoft an incredible advantage over rivals like Netscape in an era when dial-up Internet meant that downloading and installing alternative web browsers was a slog at best.
“It’s actually hard to imagine how, for Microsoft, it could have come out any worse,” TIME wrote in a Nov. 15, 1999 cover story on Jackson’s decision. But Jackson wasn’t done yet — the declaration that Microsoft was a monopolist was only the first half of his decision. Jackson’s conclusions and remedy wouldn’t come until April and June of the next year, respectively, after Gates had already stepped down as CEO and transitioned into the newly created role of “chief software architect.”
“Assuming he says yea [to the question of whether Microsoft’s monopoly was used to violate antitrust laws]–a near certainty considering Friday’s findings–he can impose a remedy as far-reaching as the total dismemberment of the Gates empire,” TIME wrote in 1999. “The gamut of possible outcomes runs from a mild go-forth-and-sin-no-more to the truly Draconian stuff: forcing Microsoft to share its Windows source code with its competitors or carving up the company into the so-called Baby Bills.” (“Baby Bills” was a clever riff on the “Baby Bells” born of the 1982 breakup of the Bell telephone system.)
In 2000, Judge Jackson took the harsher path, decreeing that Microsoft should be split into two halves, one dedicated to Windows and the other to everything else Microsoft.