WASHINGTON, D.C., Aug. 10, 1999 — Microsoft and the government today submitted their Proposed Findings of Fact in the antitrust trial; based on written testimony, in-court testimony, documents and other evidence from throughout the trial, these documents set forth each side's case.

Microsoft's Proposed Findings of Fact addresses the four major issues the government must prove in order to win its case against the company: that the Internet components in Windows are separate products that Microsoft "tied" together without any plausible consumer benefit; that Microsoft foreclosed Netscape from distributing its browser to potential customers; that Microsoft has the power to restrict software output or raise its prices over the long term without consequence; and that Microsoft's actions have harmed consumers.

Citing a mountain of documents, testimony and other evidence, the document clearly shows that:

• Microsoft's integration of Internet functions into the Windows operating system has clearly resulted in better technology, more rapid innovation, greater availability of browsing technology and dramatically lower prices.

• The inclusion of Internet Explorer in Windows 98 was a design decision made in response to the needs of consumers, software developers and computer manufacturers -- not an unlawful "tying" of two separate products. The factual record shows that Microsoft was already far along in its decision to integrate Internet support into Windows before Netscape even existed.

• Microsoft did not prevent Netscape from distributing its products to potential users; in fact, at the same time that Netscape was complaining to the government about Microsoft's supposed "foreclosure," Netscape was boasting to AOL that it had virtually unlimited distribution for its technology through a wide range of channels. Internal Netscape documents and confidential papers related to the AOL-Netscape merger show that Netscape has distributed 160 million copies of its browsing technology per year.

• Microsoft faces intense competition from a wide range of platform competitors, including AOL, Sun, IBM, Linux, Apple, non-PC devices, and the Internet itself.

After 30 days, each party will revise their documents in response to the other's proposed findings. Following oral arguments in September, the Court will then weigh the evidence and render its own Findings of Fact. A final decision in the case is not expected until late 1999 at the earliest.