The government discarded its claims under section 1 after adverse evaluation at the appellate court level. The center of the government's elite contracts accusation was that Microsoft had banned the allocation of Netscape's competing Web browser. This dispute was unproductive at the district court level since Netscape's continued to expand throughout the late 90's (Butts, 2010). Tying is fundamentally a contract conditioning the acquiring of one product on the purchase of another. Tying infringements are found where two separate products are concerned; the defendant forces its consumers to take the tied good in order to attain the tying product; the agreement influences a considerable volume of interstate business; and the defendant has marketplace control in the tying product market. The government disputed that Microsoft was at fault of tying because IE and Windows were thought to be two distinct products by customers, Netscape had experienced a decline in revenues ensuing in a substantial effect...

In the end, the appeals court mandated that the government also demonstrate that the damage to competition in the Web browser market overshadowed the advantage of putting together a browser into the operating scheme (Butts, 2010).
I don't think that the government's claims were valid. Microsoft was merely trying to be aggressive in the operating system market. Being aggressive and often being the first to market with a product can more often than not be the difference between a business succeeding or failing. In this case Microsoft knew what they were doing and thus have become more successful than anyone ever imagined.

References

Butts, Chris. (2010). The Microsoft Case 10 Years Later: Antitrust and New Leading

"New Economy" Firms. Northwestern Journal of Technology and Intellectual Property,

8(2), 275.

International Directory of Company Histories, Vol.63. St. James…