Lessons From Microsoft's Antitrust Case

In 1998, the Department of Justice filed antitrust charges against Microsoft. The suit was filed soon after one of Microsoft's competitors, Netscape, collapsed, and was supposed to determine whether or not Microsoft's recent actions leading up to that collapse were monopolistic.

To understand what was happening at the time and why it is important now, we must first define what antitrust is, or more specifically: antitrust laws. These laws prohibit actions such as price-fixing, anti-competitive mergers, and any actions meant to gain to maintain a monopoly. So what happened with Microsoft?

Microsoft was accused of "making it difficult for consumers to install competing software on computers operated by Windows." In spite of public support for Microsoft, along with some debate surrounding whether or not charges should have ever been brought on in the first place, Microsoft lost and the court ruled that the company would have to divide in half into two smaller companies. However, during the appeals process, this was reversed, and instead Microsoft was required to "give the top 20 computer makers identical contract terms for licensing Windows, and gave computer makers greater freedom to promote non-Microsoft products."

So why is this case still important today? With current tech giants such as Google, Apple, Facebook, and Amazon, there are likely to be more investigations into antitrust issues in the near future. One question may be: how necessary are these investigations? As we currently are learning about Google, many believe that the government should just let these companies run their courses, since while the government mostly failed to completely bring down Microsoft, the company was eventually weakened by the addition of regular competition from new companies like Google. If this is the case, should we wait for another big thing to come around and take down the current companies? Or are there actions the government needs to take much sooner than that could happen?

Either way, current major tech companies can learn from Microsoft's case, and the mistakes in it. One article has pieces of advice such as: "Don't deny the obvious" and "Assume everything will be made public." If it comes down to it, new large tech companies will have the background from Microsoft's original tech antitrust case to look back on and to learn from. But how necessary may these new cases be? If a huge, fundamental company like Google lost its case, what would the effects be? Is Larry Page right in saying that Google won't last any longer than it "deserves to," or will it fight to hold onto power using possibly illegitimate tactics?




Sources:
1. https://www.investopedia.com/ask/answers/08/microsoft-antitrust.asp
2. https://www.latimes.com/business/la-fi-tn-microsoft-facebook-google-amazon-apple-20190620-story.html