Final answer:
Microsoft faced a legal challenge and was accused of unfair competition. The court recommended splitting the company, but this penalty was overturned on appeal. Microsoft later reached a settlement to end its restrictive practices.
Step-by-step explanation:
Microsoft faced a legal challenge in April 2000 when a federal court determined that its behavior had become unfair competition. The court recommended that Microsoft be split into two competing firms, but this penalty was overturned on appeal. In November 2002, Microsoft reached a settlement with the government to end its restrictive practices.