United States v. Microsoft

United States v. Microsoft (87 F. Supp. 2d 30 (D.D.C. 2000)) was a court case filed against Microsoft Corporation on May 18, 1998 by the United States Department of Justice and twenty U.S. states. The plantiffs alleged that Microsoft abused monopoly power in its handling of operating system sales and web browser sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer web browser software with its Microsoft Windows operating system. Bundling them together is alleged to have been responsible for Microsoft's victory in the browser wars as every Windows user had a copy of Internet Explorer. It was further alleged that this unfairly restricted the market for competing web browsers (such as Netscape Communicator) that were slow to download over a modem or had to be purchased at a store. Underlying these disputes were questions over whether Microsoft altered or manipulated its application programming interfaces (APIs) to favor Internet Explorer over third party web browsers, Microsoft's conduct in forming restrictive licensing agreements with OEM computer manufacturers, and Microsoft's intent in its course of conduct.

Criticisms of the case

Some critics of the antitrust proceedings against Microsoft assert that they were an unjustified assault on a business that held a large market share merely by outcompeting its rivals. Some hold that the case against Microsoft was the result of collusion between government and Microsoft's competitors in an attempt to gain an unfair advantage by thwarting the free market through government coercion. Nobel economist Milton Friedman believes that the antitrust case against Microsoft set a dangerous precedent that foreshadowed increasing government regulation of what was formerly an industry that was relatively free of "government intrusion" and that future technological progress in the industry will be impeded as a result. Moreover, Friedman says that antitrust laws do more harm than good and should not exist. Strict free market advocates believe that the only type of monopolies that should be dismantled are coercive monopolies and reject the claim that Microsoft falls in this category.

Related Topics:
Free market - Milton Friedman - Coercive monopolies

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Jean Louis Gassée, CEO of Be, Inc, which at the time made a competing operating system which eventually folded in the face of Microsoft's dominance provided a series of criticisms against the antitrust suit. These criticisms were levelled at the overemphasis on the "packaging problem". Microsoft wasn't really making any money off the "sales" of Internet Explorer, and its reason for incorporating it into the operating system was because the consumer expected to have a browser packaged with the operating system. Indeed, BeOS came packaged with its web browser, NetPositive. Instead, he argued, Microsoft's true anticompetitive clout was in the rebates it offered to OEMs preventing other operating systems from getting a foothold in the market.

Related Topics:
Jean Louis Gassée - Be, Inc - BeOS

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