> It was very close to splitting Microsoft because Microsoft was held to have monopolistic market share and was abusing its monopolistic position in operating systems to illegally and anticompetitively push their web browser. Violation of antitrust law.
This was overturned on appeal and subsequently settled out of court so it was never actually determined whether bundling IE with Windows would have been illegal under US antitrust law.
Other aspects of the case were upheld on appeal (mostly related to shady dealings with OEMs) but the appeals panel concluded that the district judge incorrectly analyzed the browser issue. They also overturned the original court ordered split for the same reason.