In April 2000, a federal court held that Microsoft’s behavior had crossed the line into unfair competition, and

recommended that the company be split into two competing firms. However, the court overturned that penalty on

appeal, and in November 2002 Microsoft reached a settlement with the government that it would end its restrictive

practices.

The concept of restrictive practices is continually evolving, as firms seek new ways to earn profits and

government regulators define what is permissible. A situation where the law is evolving and changing is always

somewhat troublesome, since laws are most useful and fair when firms know what they are in advance. In
268 11 • Monopoly and Antitrust Policy

addition, since the law is open to interpretation, competitors who are losing out in the market can accuse

successful firms of anticompetitive restrictive practices, and try to win through government regulation what
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