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MICROSOFT
MONOPOLY HOUNDS OR JUST SMART BUSINESS PEOPLE? January 21, 1998 |
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Return to this forum's introduction.
Questions asked
in this forum:
What laws are involved in this dispute? Is Microsoft's practices monopolistic? What is an "operating system"? Why doesn't the Justice Department let the market play out? Can competition and integration co-exist? What are the larger issues of this case? Viewer comments.
NewsHour Backgrounders
January 13, 1998
A background report on the Microsoft anti-trust case.
October 21, 1997
The Justice Department formally files its anti-trust complaint against Microsoft.
August 6, 1997
Microsoft takes a bite out of Apple.
June 11, 1997:
Netscape and Microsoft agreed to limit access to private information online.
September 20, 1996:
Tom Bearden reports on the cyber war between Netscape and Microsoft.
Browse the NewsHour's coverage of cyberspace and the law.
OUTSIDE LINKS:
PBS's Robert Cringley muses about Microsoft. December 25, 1997 and January 15, 1998
U.S. Department of Justice
Microsoft's response to the Department of Justice's actions.
Microsoft and Netscape
Mario Cipriani of Scottsdale, AZ, asks:
Is Microsoft engaging in monopolistic practices?
Mr. Rule, attorney for Microsoft, responds:
I refer you to my answer to Mr. Coronado's last question. It is worth pointing that no court has ever found Microsoft to possess monopoly power, much less to have engaged in monopolistic practices. (Even in obtaining the consent decree from Microsoft in 1994, DoJ admitted that the challenged practices did not account for Microsoft's success in the marketplace.) It is also worth noting that, given the DoJ's "no holds barred" approach to attacking Microsoft, it would jump at the opportunity to charge Microsoft with monopolization if DoJ thought it had the slightest chance of winning. Notably in the most recent go round -- and notwithstanding the strong urging of some of Microsoft's largest competitors -- DoJ has not brought such claims against Microsoft.
Under U.S. antitrust laws, it is not illegal to be successful -- even to the point of becoming the only company in an important industry (a position that with all its competitors Microsoft cannot claim). Our laws encourage a competitor to make a "better mousetrap" even if that means that competitors can no longer get anyone to buy their obsolete mousetraps. That is what drives the market and the antitrust are intended to facilitate and support such competition not undermine it by penalizing those who succeed. What the antitrust do prohibit are "exclusionary" or "predatroy" practices that have no legitimate business justification (e.g., do not improve efficiency or increase value to consumers) but that simply exclude competition from the market. Microsoft's success is based on constantly building and selling better mousetraps not on engaging in exclusionary practices.
Mr. Black of the Computer & Communications Industry Association responds:
This case is a clear example of Microsoft's anticompetitive practices. The potential of Microsoft's expanding market dominance was recognized in the 1995 Consent Decree, an agreement between the U.S. Justice Department and Microsoft. The signing of the Decree followed the Justice Department's investigation of alleged illegal and anticompetitive behavior by Microsoft to maintain its operating system software monopoly. The conclusion of that investigation was that because of Microsoft's dominance, competition had been impeded, innovation slowed and consumer choices limited.
At issue in this case is whether Microsoft unfairly used its dominance in the operating systems market to force computer manufacturers to offer Internet Explorer on PCs -- as a condition of those same computer manufacturers keeping their license to install the Windows 95 operating system. The Justice Department argues, and CCIA agrees, that such restrictive and anticompetitive licensing agreements are in violation of the Consent Decree.
Next: What is an "operating system"?
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