On Nov. 11, 1997, Microsoft Corporation (Microsoft) responded to the Department of Justice's (DOJ) petition to find Microsoft in contempt of the 1994 Consent Decree.  Microsoft first presents a long list of facts which contradict claims made by the DOJ.  They then present six points of their argument.

1. The DOJ's claim that Microsoft is monopolistic is unfounded.
2. Microsoft has not, in fact, violated the Consent Decree.
3. The case should be dismissed on the basis of Equitable Estoppal.
4. The Court should dismiss the DOJ's allegations that Microsoft's Non-Disclosure Agreements are overly broad.
5. Microsoft should not be summarily subject to contempt sanctions without hearing.
6. The DOJ should be required to respect the confidential nature of Microsoft's valuable property.

Contradictory Facts

Microsoft claims that many of the facts presented by the DOJ are incorrect and misleading.  They present a long list of additional facts, and refutations of the DOJ's facts.  By demonstrating contention over the facts of the case, Microsoft can argue that the court cannot summarily rule against Microsoft without a discovery period and hearing.

Claim of Monopoly Unfounded

The DOJ claims that Microsoft, holding approximately 80% of the operating system (OS) market, has a monopoly in that market.  Microsoft, however, insists that there is no specific market for just OSs.  Internet browsers and the Java Virtual Machine perform many of the same functions as OSs, and as the DOJ itself admits, are in stiff competition with Microsoft OSs.  Microsoft claims that it does nothing to prevent consumers from choosing other operating systems, proof that their success is because of their quality, not from monopolistic strategies.

Microsoft has not Violated Consent Decree

Microsoft first states that the DOJ neglects to adequately consider the proviso to Section IV(E)(i) of the Consent Decree which allows Microsoft to continue to develop "integrated products", an integral part of Microsoft's arguments.   Microsoft supports their claim that they are not in violation of the Consent Decree by explaining that Internet functionality has been part of Windows 95 throughout its whole development.  Microsoft goes on to explain that the fact that a product is at one time separate from the OS does not mean that it can't later become integrated.  In fact, many features which are now considered integral to the OS were at one point separate products.  Microsoft argues that the DOJ's argument centers solely on whether I.E. can be considered a separate product, not whether it is part of an integrated product, according to the everyday meaning of the word "integrated".  Microsoft claims that Windows 95 is an "integrated" product - that is, many features and functionalities have been united and combined into one, including I.E..  Finally, Microsoft claims that the DOJ's discussion of Microsoft's intent (to gain unfair advantage in the "Browser War" to preserve their standing in the OS market) is irrelevant and reveals contradictions in the DOJ's argument.  Intent is irrelevant because this case is to investigate the accusation of a simple violation of a clause of the Consent Decree.  The discussion reveals contradictions because if a browser is a completely separate product from the OS, then it poses no threat to the OS market.  However, if the browser poses a real threat to the existence of operating systems, then this means browsers contain all the functionality of OSs, and should be considered integratable.

Equitable Estoppal

The doctrine of equitable estoppal states that if the DOJ could have brought their case earlier, but didn't, and because of this caused undue injury to Microsoft, then the DOJ is barred from bringing action against Microsoft.  Microsoft claims that the DOJ knew of Microsoft's plans to integrate I.E. with the OS since the signing of the Consent Decree in 1994, yet didn't bring this case against Microsoft until late 1997.  Microsoft, assuming that there was no problem with the integration of I.E. and the OS, continued to develop this functionality.  If the case were brought against Microsoft at the earliest point that the Government knew about it, the injury caused to Microsoft would have been much less severe.

Dismiss Non-Disclosure Agreements

This section of the argument is Microsoft's response to the DOJ's claim that Microsoft's Non-Disclosure Agreements (NDA) are excessively broad, prohibiting third parties from raising complaints against Microsoft, and hindering the DOJ's investigation.  Microsoft claims that NDAs are commonplace in the industry to protect trade secrets, and that their NDAs are no more broad or restrictive than other company's.    Furthermore, the DOJ has no evidence that Microsoft's NDAs have prevented anyone from communicating complaints to the DOJ, and the DOJ has ample means to investigate Microsoft despite the NDAs.

No Summary Conviction of Microsoft without Hearing

Microsoft claims that because of the disputes over the facts of the case, Microsoft should not be summarily convicted of violating the Consent Decree.  If the Judge does not decide that the DOJ has no case (as Microsoft hopes), he must call for a period of discovery so that the facts can be sorted out.

DOJ Must Respect Confidentiality

The nature of this case requires that Microsoft submit for review internal documents which could reveal trade secrets, or other confidential material.  Microsoft claims that the DOJ has already shown disregard for confidentiality by publicly filing documents specifically marked as confidential without prior notification to Microsoft.  Microsoft asks that the DOJ be required to respect the confidential nature of Microsoft's property.