Breaking Up Is Hard to Do, So Don't Do It

Competition Policy and Antitrust

Article Snapshot

Author(s)

Robert W. Hahn

Source

AEI-Brookings Joint Center Policy Matters 00-05; A revised version appeared in the Los Angeles Times on April 30, 2000

Summary

This paper looks at the proposal to break Microsoft into two companies.

Policy Relevance

Consumers benefit from having a standard product, and breaking up the company that makes it can hurt consumers.

Main Points

  • The Department of Justice has proposed breaking Microsoft into two separate companies.

  • Breaking up a company that makes cheese or cigarettes is one thing, but breaking up a company that makes key software used by millions of people is very risky.

  • The standardization of the Windows operating system makes life much easier for consumers and software makers, and breaking up Microsoft endangers these benefits.

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