III. Attempted Monopolization
Microsoft further challenges the District Court's determination of liability for "attempt[ing] to monopolize ... any part of the trade or commerce among the several States." 15 U.S.C. s 2 (1997). To establish a s 2 violation for attempted monopolization, "a plaintiff must prove (1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability of achieving monopoly power." Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993); see also Times-Picayune Pub. Co. v. United States, 345 U.S. 594, 626 (1953); Lorain Journal Co. v. United States, 342 U.S. 143, 153-55 (1951). Because a deficiency on any one of the three will defeat plaintiffs' claim, we look no further than plaintiffs' failure to prove a dangerous probability of achieving monopoly power in the putative browser market.
The determination whether a dangerous probability of success exists is a particularly fact-intensive inquiry. Because the Sherman Act does not identify the activities that constitute the offense of attempted monopolization, the court "must examine the facts of each case, mindful that the determination of what constitutes an attempt, as Justice Holmes explained, 'is a question of proximity and degree.' " United States v. Am. Airlines, Inc., 743 F.2d 1114, 1118 (5th Cir. 1984) (quoting Swift & Co. v. United States, 196 U.S. 375, 402 (1904)). The District Court determined that "[t]he evidence supports the conclusion that Microsoft's actions did pose such a danger." Conclusions of Law, at 45. Specifically, the District Court concluded that "Netscape's assent to Microsoft's market division proposal would have, instanter, resulted in Microsoft's attainment of monopoly power in a second market," and that "the proposal itself created a dangerous probability of that result." Conclusions of Law, at 46 (citation omitted). The District Court further concluded that "the predatory course of conduct Microsoft has pursued since June of 1995 has revived the dangerous probability that Microsoft will attain monopoly power in a second market." Id.
At the outset we note a pervasive flaw in the District Court's and plaintiffs' discussion of attempted monopolization. Simply put, plaintiffs have made the same argument under two different headings--monopoly maintenance and attempted monopolization. They have relied upon Microsoft's s 2 liability for monopolization of the operating system market as a presumptive indicator of attempted monopolization of an entirely different market. The District Court implicitly accepted this approach: It agreed with plaintiffs that the events that formed the basis for the s 2 monopolization claim "warrant[ed] additional liability as an illegal attempt to amass monopoly power in 'the browser market.' " Id. at 45 (emphasis added). Thus, plaintiffs and the District Court failed to recognize the need for an analysis wholly independent of the conclusions and findings on monopoly maintenance.
To establish a dangerous probability of success, plaintiffs must as a threshold matter show that the browser market can be monopolized, i.e., that a hypothetical monopolist in that market could enjoy market power. This, in turn, requires plaintiffs (1) to define the relevant market and (2) to demonstrate that substantial barriers to entry protect that market. Because plaintiffs have not carried their burden on either prong, we reverse without remand.
A. Relevant Market
A court's evaluation of an attempted monopolization claim must include a definition of the relevant market. See Spectrum Sports, 506 U.S. at 455-56. Such a definition establishes a context for evaluating the defendant's actions as well as for measuring whether the challenged conduct presented a dangerous probability of monopolization. See id. The District Court omitted this element of the Spectrum Sports inquiry.
Defining a market for an attempted monopolization claim involves the same steps as defining a market for a monopoly maintenance claim, namely a detailed description of the purpose of a browser--what functions may be included and what are not--and an examination of the substitutes that are part of the market and those that are not. See also supra Section II.A. The District Court never engaged in such an analysis nor entered detailed findings defining what a browser is or what products might constitute substitutes. In the Findings of Fact, the District Court (in a section on whether IE and Windows are separate products) stated only that "a Web browser provides the ability for the end user to select, retrieve, and perceive resources on the Web." Findings of Fact p 150. Furthermore, in discussing attempted monopoli- zation in its Conclusions of Law, the District Court failed to demonstrate analytical rigor when it employed varying and imprecise references to the "market for browsing technology for Windows," "the browser market," and "platform-level browsing software." Conclusions of Law, at 45.
Because the determination of a relevant market is a factual question to be resolved by the District Court, see, e.g., All Care Nursing Serv., Inc. v. High Tech Staffing Servs., Inc., 135 F.3d 740, 749 (11th Cir. 1998); Tunis Bros. Co., Inc. v. Ford Motor Co., 952 F.2d 715, 722-23 (3d Cir. 1991); Westman Comm'n Co. v. Hobart Int'l, Inc., 796 F.2d 1216, 1220 (10th Cir. 1986), we would normally remand the case so that the District Court could formulate an appropriate definition. See Pullman-Standard v. Swint, 456 U.S. 273, 291-92 & n.22 (1982); Janini v. Kuwait Univ., 43 F.3d 1534, 1537 (D.C. Cir. 1995); Palmer v. Shultz, 815 F.2d 84, 103 (D.C. Cir. 1987). A remand on market definition is unnecessary, however, because the District Court's imprecision is directly traceable to plaintiffs' failure to articulate and identify evidence before the District Court as to (1) what constitutes a browser (i.e., what are the technological components of or functionalities provided by a browser) and (2) why certain other products are not reasonable substitutes (e.g., browser shells or viewers for individual internet extensions, such as Real Audio Player or Adobe Acrobat Reader). See Plaintiffs' Joint Proposed Findings of Fact, at 817-19, reprinted in 2 J.A. at 1480-82; Plaintiffs' Joint Proposed Conclusions of Law s IV (No. 98-1232); see also Lee v. Interstate Fire & Cas. Co., 86 F.3d 101, 105 (7th Cir. 1996) (stating that remand for development of a factual record is inappropriate where plaintiff failed to meet burden of persuasion and never suggested that additional evidence was necessary). Indeed, when plaintiffs in their Proposed Findings of Fact attempted to define a relevant market for the attempt claim, they pointed only to their separate products analysis for the tying claim. See, e.g., Plaintiffs' Joint Proposed Findings of Fact, at 818, reprinted in 2 J.A. at 1481. However, the separate products analysis for tying purposes is not a substitute for the type of market definition that Spectrum Sports requires. See infra Section IV.A.
Plaintiffs' proposed findings and the District Court's actual findings on attempted monopolization pale in comparison to their counterparts on the monopoly maintenance claim. Compare Findings of Fact p 150, and Plaintiffs' Joint Proposed Findings of Fact, at 817-819, reprinted in 2 J.A. at 1480-82, with Findings of Fact p p 18-66, and Plaintiffs' Joint Proposed Findings of Fact, at 20-31, reprinted in 1 J.A. at 658-69. Furthermore, in their brief and at oral argument before this court, plaintiffs did nothing to clarify or ameliorate this deficiency. See, e.g., Appellees' Br. at 93-94.`
B. Barriers to Entry
Because a firm cannot possess monopoly power in a market unless that market is also protected by significant barriers to entry, see supra Section II.A, it follows that a firm cannot threaten to achieve monopoly power in a market unless that market is, or will be, similarly protected. See Spectrum Sports, 506 U.S. at 456 ("In order to determine whether there is a dangerous probability of monopolization, courts have found it necessary to consider ... the defendant's ability to lessen or destroy competition in that market.") (citing cases). Plaintiffs have the burden of establishing barriers to entry into a properly defined relevant market. See 2A Phillip E. Areeda et al., Antitrust Law p 420b, at 57-59 (1995); 3A Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law p 807g, at 361-62 (1996); see also Neumann v. Reinforced Earth Co., 786 F.2d 424, 429 (D.C. Cir. 1986). Plaintiffs must not only show that barriers to entry protect the properly defined browser market, but that those barriers are "significant." See United States v. Baker Hughes Inc., 908 F.2d 981, 987 (D.C. Cir. 1990). Whether there are significant barriers to entry cannot, of course, be answered absent an appropriate market definition; thus, plaintiffs' failure on that score alone is dispositive. But even were we to assume a properly defined market, for example browsers consisting of a graphical interface plus internet protocols, plaintiffs nonetheless failed to carry their burden on barriers to entry.
Contrary to plaintiffs' contention on appeal, see Appellees' Br. at 91-93, none of the District Court's statements constitutes a finding of barriers to entry into the web browser market. Finding of Fact 89 states:
At the time Microsoft presented its proposal, Navigator was the only browser product with a significant share of the market and thus the only one with the potential to weaken the applications barrier to entry. Thus, had it convinced Netscape to accept its offer of a "special relationship," Microsoft quickly would have gained such control over the extensions and standards that networkcentric applications (including Web sites) employ as to make it all but impossible for any future browser rival to lure appreciable developer interest away from Microsoft's platform.
This finding is far too speculative to establish that competing browsers would be unable to enter the market, or that Microsoft would have the power to raise the price of its browser above, or reduce the quality of its browser below, the competitive level. Moreover, it is ambiguous insofar as it appears to focus on Microsoft's response to the perceived platform threat rather than the browser market. Finding of Fact 144, on which plaintiffs also rely, is part of the District Court's discussion of Microsoft's alleged anticompetitive actions to eliminate the platform threat posed by Netscape Navigator. This finding simply describes Microsoft's reliance on studies indicating consumers' reluctance to switch browsers, a reluctance not shown to be any more than that which stops consumers from switching brands of cereal. Absent more extensive and definitive factual findings, the District Court's legal conclusions about entry barriers amount to nothing more than speculation.
In contrast to their minimal effort on market definition, plaintiffs did at least offer proposed findings of fact suggesting that the possibility of network effects could potentially create barriers to entry into the browser market. See Plaintiffs' Joint Proposed Findings of Fact, at 822-23, 825-27, reprinted in 2 J.A. at 1485-86, 1488-90. The District Court did not adopt those proposed findings. See Findings of Fact p 89. However, the District Court did acknowledge the possibility of a different kind of entry barrier in its Conclusions of Law:
In the time it would have taken an aspiring entrant to launch a serious effort to compete against Internet Explorer, Microsoft could have erected the same type of barrier that protects its existing monopoly power by adding proprietary extensions to the browsing software under its control and by extracting commitments from OEMs, IAPs and others similar to the ones discussed in [the monopoly maintenance section].
Conclusions of Law, at 46 (emphasis added).
Giving plaintiffs and the District Court the benefit of the doubt, we might remand if the possible existence of entry barriers resulting from the possible creation and exploitation of network effects in the browser market were the only concern. That is not enough to carry the day, however, because the District Court did not make two key findings: (1) that network effects were a necessary or even probable, rather than merely possible, consequence of high market share in the browser market and (2) that a barrier to entry resulting from network effects would be "significant" enough to confer monopoly power. Again, these deficiencies are in large part traceable to plaintiffs' own failings. As to the first point, the District Court's use of the phrase "could have" reflects the same uncertainty articulated in testimony cited in plaintiffs' proposed findings. See Plaintiffs' Joint Proposed Findings of Fact, at 822 (citing testimony of Frederick Warren-Boulton), at 826 (citing testimony of Franklin Fisher), reprinted in 2 J.A. at 1485, 1489. As to the second point, the cited testimony in plaintiffs' proposed findings offers little more than conclusory statements. See id. at 822-27, reprinted in 2 J.A. at 1485-90. The proffered testimony contains no evidence regarding the cost of "porting" websites to different browsers or the potentially different economic incentives facing ICPs, as opposed to ISVs, in their decision to incur costs to do so. Simply invoking the phrase "network effects" without pointing to more evidence does not suffice to carry plaintiffs' burden in this respect.
Any doubt that we may have had regarding remand instead of outright reversal on the barriers to entry question was dispelled by plaintiffs' arguments on attempted monopolization before this court. Not only did plaintiffs fail to articulate a website barrier to entry theory in either their brief or at oral argument, they failed to point the court to evidence in the record that would support a finding that Microsoft would likely erect significant barriers to entry upon acquisition of a dominant market share.
Plaintiffs did not devote the same resources to the attempted monopolization claim as they did to the monopoly maintenance claim. But both claims require evidentiary and theoretical rigor. Because plaintiffs failed to make their case on attempted monopolization both in the District Court and before this court, there is no reason to give them a second chance to flesh out a claim that should have been fleshed out the first time around. Accordingly, we reverse the District Court's determination of s 2 liability for attempted monopolization.