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SUN MICROSYSTEMS APPLAUDS JUDGE JACKSON'S RULING IN THE MICROSOFT MATTER

SUN MICROSYSTEMS APPLAUDS JUDGE JACKSON'S RULING IN THE MICROSOFT MATTER

Sun Proposes Remedies for Microsoft to Ensure Restoration of Competition and Innovation in the Marketplace



PALO ALTO, CA. -- April 3, 2000 -- Sun Microsystems, Inc. today stated it welcomed Federal District Court Judge Thomas Penfield Jackson's verdict in the Microsoft federal antitrust case.

Judge Jackson's earlier findings of fact exposed the wealth of evidence supporting his determination that Microsoft has monopoly power in the market for PC operating systems and has abused its power in very significant ways. With his verdict of guilt today, Judge Jackson has found that Microsoft's acts broke United States antitrust law.

"Today's important decision confirms what almost everybody in the world knows -- Microsoft is a monopoly that has acted illegally," said Scott McNealy, Chief Executive Officer, Sun Microsystems, Inc. "The Justice Department and the States deserve immense credit for putting together a case that so clearly showed Microsoft's true colors. Now is the time to move on to the important stage of this trial -- determining how to prevent Microsoft from continuing its use of monopoly power to stifle innovation and harm consumers. We hope the Court will act decisively to ensure that Microsoft's illegal activity -- and the harm that it has done to the industry and to consumers -- is brought to an end forcefully and permanently."

As the case advances to the remedies stage, Sun believes that only a combination of stringent structural and behavioral remedies will ensure that Microsoft can no longer stifle competition through the abuse of its monopoly power. Specifically, Sun believes that:
  • Microsoft's past conduct demonstrates that behavioral remedies alone will not be enough to foster true competition and innovation in the market. The only sure way to curtail Microsoft's monopoly in the PC operating systems market is with a structural approach in which Microsoft's applications and Internet content businesses are divested as separate companies and the remaining operating systems business is divided into three distinct and competing companies.
  • Microsoft must be forbidden from using its massive cash hoard to kill competition through minority, majority and IP technology investments. The company must be prohibited from using its ill-gotten gains to buy its way into new markets and lock in new customers.
  • The technology standards playing field must be leveled so that any company can create products that will successfully interoperate with Microsoft's ubiquitous operating systems and products. This solution would require Microsoft to publish its programming interfaces openly and freely.
  • Microsoft must be required to make its pricing public and nondiscriminatory so that it cannot be used as illegal leverage.
  • Microsoft must be prohibited from entering into exclusive or preclusive agreements that require its PC OEM customers and Internet Access Providers to do business only with Microsoft or prohibit its customers from doing any business with a Microsoft competitor.
"Now that the verdict is in, the next step is to address the harm that has been done to consumers and the industry," said Michael Morris, General Counsel, Sun Microsystems, Inc. "To ensure that the remedies are effective, Sun believes that a combination of structural and conduct approaches should be imposed. The result of our approach will be: Microsoft, for the first time in over 15 years, will be subject to the discipline of the market, competition will be restored and consumers will have access to greater choice, better products and lower prices. Only in this way will the enormous growth potential of the United States technology industry be protected."

About Sun Microsystems, Inc.

Since its inception in 1982, a singular vision -- "The Network Is The Computer™" -- has propelled Sun Microsystems, Inc. (Nasdaq: SUNW), to its position as a leading provider of industrial-strength hardware, software and services that power the Internet and allow companies worldwide to ".com" their businesses. With $13 billion in annual revenues, Sun can be found in more than 170 countries and on the World Wide Web at http://sun.com.

Sun, Sun Microsystems, the Sun logo and The Network Is The Computer are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and other countries.
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