Microsoft Response to U.S. Court of Appeals Decision

REDMOND, Wash., June 28, 2001 — In response to the U.S. Court of Appeals decision today, Microsoft Corp. issued the following initial response.

“Microsoft is pleased that the U.S. Court of Appeals has overturned most of the lower court’s findings against the company, drastically narrowing the case and removing the breakup cloud from the company.”

“The central issue in this case is the fundamental principle that every company must have the ability to innovate and improve its products on behalf of its customers. On this point, we are very pleased that this ruling reverses the District Court’s previous ruling and provides a positive framework for Microsoft if these issues have to be retried. Today’s ruling creates a better framework for allowing companies to improve products on behalf of consumers by adding new and innovative features.”

“While there are some aspects of this ruling on which we didn’t prevail, we continue to believe that we face significant competition every day and we must continually improve our products in order to succeed.”

“We recognize that as a successful company, we have an important responsibility under the law and to the broader industry. We take that responsibility very seriously, and we will continue to work hard to provide great opportunity for our industry partners and consumers. We also understand that the best outcome for our customers, shareholders, partners and the entire industry is a quick resolution to this case. The case was substantially narrowed today, and we will continue to work toward resolving the remaining issues expeditiously.”

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Carla Lewis, senior director, Microsoft Investor Relations, (425) 936-3703

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