Applications Barrier to Entry and Its Implications for the Microsoft Remedies, The: Comment on Iansiti and Richards

Competition Policy and Antitrust

Article Snapshot


Michael L. Katz and William Rogerson


Antitrust Law Journal, Vol. 75, No. 3, ABA, 2009


This paper asks if software competition has fundamentally changed since 2002.

Policy Relevance

Microsoft still dominates the software business in many ways, and although competition has grown there has been little fundamental change.

Main Points

  • Microsoft’s Windows operating system jeopardized competition, because consumers would not switch to rival products when most other users and software developers worked with Windows.

  • The 2002 court order ending the antitrust case against Microsoft sought to improve competition in “middleware,” software that serves end users by hosting web browsing or email, and which could offer developers and users popular alternatives to Windows.

  • Microsoft still controls over 90 percent for the market for operating systems for personal computers.

  • Internet-based platforms like Google offer an alternative to Microsoft’s Windows for some purposes, but not enough to erode Microsoft’s power:
    • Key applications like word processing have not migrated to the Internet, and are still based on Microsoft’s Windows.
    • Many computers run older legacy software that works only with Windows. 
    • Microsoft’s Internet Explorer is still the dominant web browser.
    • Few powerful hardware alternatives to the personal computer have caught on.

  • These factors would need to change to diminish Microsoft’s market power. It is doubtful whether the goals of the 2002 court order have been achieved.

  • Some have argued that court review moves too slowly to adapt to rapid technological change, but in this case the market does not seem to have changed fundamentally.

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