Smile, It's Over!

Competition Policy and Antitrust

Article Snapshot

Author(s)

George Priest

Source

The Wall Street Journal, November 4, 2002; AEI-Brookings Joint Center Policy Matters 02-50

Summary

This short piece looks at the benefits of ending the case against Microsoft.

Policy Relevance

Microsoft's size and power came from offering a quality, standard product to consumers. Competition policies punishing success in the market would harm consumers.

Main Points

  • In 2002, the Department of Justice (DOJ) concluded its antitrust case against Microsoft. DOJ’s theory was weak to begin with.

  • DOJ admitted that Microsoft’s Windows operating system dominated the market because it was a superior product, not because of illegal acts.

  • Microsoft’s success in the market constantly reminded everyone of the enormous consumer benefits of having a standard operating system.

  • A remedy that ended Microsoft’s dominance would harm consumers.
    • Why not break up Microsoft, as AT&T was broken up? AT&T got its monopoly through regulation, not by offering a superior product.
    • Proposals to break up Microsoft or regulate it like AT&T were rightly rejected.

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