Assessing Microsoft from a Distance

Competition Policy and Antitrust

Article Snapshot

Author(s)

John Lopatka

Source

Antitrust Law Journal, Vol. 75, Issue 3, pg 811, ABA, 2009; conference paper from the Searle Symposium, “The End of the Microsoft Antitrust Case?”, Nov. 15-16, 2007

Summary

This article asks if the antitrust case against Microsoft did more good than harm.

Policy Relevance

The case against Microsoft likely was not justified, as the costs were large, while evidence that Microsoft’s acts harmed competition or consumers is weak.

Main Points

  • The antitrust case against Microsoft was controversial.
    • Microsoft gained its monopoly by serving consumers
    • It is hard to show that Microsoft’s rivals would have been competitors in future.
    • Consumers would not necessarily be better off without a dominant Microsoft.

  • In hindsight, Microsoft’s practices had little effect on rivals Netscape and Java; the court orders failed to target important behavior.
    • Many ISPs did not sign agreements with Microsoft restricting the use of Netscape Navigator, but made the same choices as those that did.
    • Many of Microsoft’s practices would have stopped because of market forces.
    • Microsoft might have tried to deceive Java developers into making products that worked only with Windows, but none were deceived.

  • Neither Netscape nor Java was likely to become competitors to Windows. Neither product was technically capable of supporting such a role.

  • Most of Microsoft’s practices made sense for consumers.

  • Today, there is more competition in the software market because of factors that competition law authorities did not foresee. Microsoft’s main competitor today is Google, which offers users a platform on the Internet.
    • This change suggests that the Microsoft could shut down competition in the long run by targeting Java or Netscape was wrong.
    • The court orders probably did not create this competition.

  • There was evidence that Microsoft intended to target Java and Netscape. But relying on evidence of intent is tricky, because it is not enough to show that a firm’s acts actually did harm competition or consumers.

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