Microsoft and Antitrust law

Microsoft and Antitrust law

America's century-old antitrust law is increasingly irrelevant to our current worldwide information technology market. This law is outdated, in accordance to the modern Microsoft situation, because in the past there wasn't technology as there is now. Recently the government has been accusing Microsoft as being a monopoly. "Techno-Optimists" claim that "efforts by government to promote competition by restraining high-tech firms that acquire market power will only stifle competition." Some analysts disagree. They concede that dynamic technology makes it tough to sustain market power. Still, consumers will want compatible equipment, which will lead them to buy whatever product other consumers are using, even if the product is inferior.

The range of views extends from the optimists who think that changing technology removes the need for antitrust, to "middle-of-the-roaders" who think that antitrust has always been and still is an important weapon in the government's arsenal. Microsoft is not a monopoly. Our world of telecommunications and information technology has brought about many changes in many fields but new technology has neither extinguished nor revitalized the reason for antitrust. There are monopolies that the government ought to control. Those are the very monopolies that the government created itself. It is government that creates monopoly power by erecting and maintaining barriers to market entry.

In the most recent dispute between Microsoft and the Department of Justice (DOJ), Microsoft is accused of "tying-in" an Internet browser into Windows. Microsoft's "tie-in" of its browser (Internet Explorer) with its operating system (Windows 95) is a tie-in that shows no greater threat to competition than the packaging of tires with cars, cream with coffee, laces with shoes, even left gloves with right gloves. In actuality, tying arrangements is pro-competitive. Consumers will buy the product that is more appealing to their needs. Seven years ago the Federal Trade Commission began its investigation of Microsoft's market power in the sale of operating systems for personal computers. That investigation was later joined by the DOJ and pursued vigorously by Anne Bingaman, then head of the Antitrust Division. The DOJ uncovered one practice it deemed worthy of challenge.

Microsoft licensed its Window...

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... the DOJ require the New York Times to eliminate its business section in order to protect The Wall Street Journal? Why should the answer to that question be any different if the Times were to sell its business section separately, or if the Times sold 90 percent of the newspapers in New York? Our antitrust laws were not intended to prop up competitors but to ensure that consumers benefit from the widespread availability of goods and services at fair prices." Therefore I truly believe Microsoft is not a monopoly.

Bibliography

Bank, David. "Why Software and Antitrust Law Make an Uneasy Mix," The Wall Street Journal, October 22, 1997, p. B1.

Gates, Bill., "Why the Justice Department Is Wrong," The Wall Street Journal, November 10, 1997, p. A22.

Moore, James F., "U.S. v. Microsoft: The Bigger Question," New York Times, January 25, 1998, p. 12-BU.

Train, Kenneth E., Optimal Regulation : The Economic Theory of Natural Monopoly, October 1991, p231-45

Wollenberg, Keith K., "An Economic Analysis of Tie-In Sales: Re-Examining the Leverage Theory," Stanford Law Review 39 (1987): 737, 755-56

"Microsoft Under Attack, but Who Is It Hurting?" USA Today, October 23, 1997