Microsoft: A Remedial Failure

Interoperability and Competition Policy and Antitrust

Article Snapshot


Carl Shapiro


Antitrust Law Journal, Vol. 75, Issue 3, pp. 739-772, 2009; conference paper from the Searle Symposium, “The End of the Microsoft Antitrust Case?” Nov. 15-16, 2007


This article assesses the outcome of the antitrust suit against Microsoft.

Policy Relevance

The decree intended to restore competition after the antitrust suit against Microsoft was far too weak, and has failed.

Main Points

  • The antitrust suit against Microsoft, which culminated in a consent decree enter in 2002, was intended to deny Microsoft the profits from its power, end the monopoly, and restore competition.

  • Microsoft acquired its monopoly legally, but illegally sought to squelch potential competition from Netscape and Java. The remedy needed to restore potential competition by lowering entry barriers for applications likely to compete with Microsoft.

  • Generally, private antitrust suits and awards of damages ensure that firms like  Microsoft do not profit from illegal acts and compensate consumers.

  • Injunctions requiring Microsoft to give rivals access to its works protected by copyright, trade secret, or patent law are the ideal way to restore competition, because information can be shared by many without taking away others’ ability to use it.

  • The Microsoft remedy was too weak because it:
    • Simply barred Microsoft from acting illegally in the future, not enough to repair the harm to competition already done.
    • Rejected two strong measures, making Microsoft’s browser Internet Explorer open source and requiring Microsoft to allow another operating system such as Linux to work with its popular “Office” software.
    • Charged royalties for access to some of Microsoft’s intellectual property.

  • Microsoft still dominates the operating system market today, showing that the remedy has failed.

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