Author(s)
David A. Heiner
Source
Antitrust Law Journal, Vol. 75, No. 3, ABA, 2009; conference paper from the Searle Symposium, “The End of the Microsoft Antitrust Case?”, Nov. 15-16, 2007
Summary
This article compares how regulators in Europe and the United States approach Microsoft.
Policy Relevance
The best remedies in competition law cases create opportunities for competitors. Remedies should be considered before a case is brought.
Main Points
- For many years, Microsoft has operated continuously under various court orders entered in antitrust suits in Europe and the United States in 1994, 2002, and 2004.
- Operating systems like Microsoft’s Windows offer a platform with tools for software developers and users. As hardware and networks improve, each new version of the operating system includes more features.
- This model helps users take advantage of new technology efficiently, but means that some developers end up competing with the platform itself.
- The 2002 United States antitrust decree orders Microsoft to avoid agreements with computer makers or software designs that make it hard for rival software to plug in to Windows. The focus of this decree is on ensuring that competitors have opportunities.
- This decree worked well, as new software products for security, new media players, and new toolbars now compete with Windows.
- The European decree limits Microsoft’s addition of new features to Windows, like a media player. A version of Windows must be offered without it, but there is little demand for it. Limiting how Microsoft responds to consumers does not work well.
- Remedies should simply remove barriers to competition, not try to engineer a market outcome, such as a reduction in market share.
- When rivals do not take advantage of an opportunity it can be a sign either that he remedy is not as important as believed, or the remedy has not been implemented well.
- Many firms have licensed technology from Microsoft that helps servers communicate with computers running Windows. This showed that the license terms are workable. Today, Microsoft simply publishes most protocols openly.
- Global cooperation between competition policy regulators is important. If they approach remedies differently, consumers will be harmed as the firm’s product will no longer serve as a standard.
