Microsoft Court Decision Opens the Door for Settlement

Competition Policy and Antitrust

Article Snapshot

Author(s)

Robert W. Hahn

Source

AEI-Brookings Joint Center Policy Matters 01-19, July 2001

Summary

This paper looks at how the antitrust suit against Microsoft could be settled.

Policy Relevance

The economy needs firms like Microsoft to lead growth, and resistance to settling the suit hurts everyone.

Main Points

  • The lower court judge in the antitrust suit against Microsoft originally ordered Microsoft be broken up into two companies: one that made operating systems and another that made applications software.

 

  • The appeals court rejected many of the lower court’s conclusions, making it likely that the Department of Justice and Microsoft might reach a compromise settlement.

 

  • The appeals court ruled that adding browser software to the Windows operating system (“tying”) was legal unless the government showed consumers would be hurt.

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