Milestone: Can we Antitrust Microsoft?

No matter what one studies at GSPIA (Graduate School of Public & International Affairs), at the University of Pittsburgh, proficiency in policy analysis is necessary. When referring to governance, as it relates to public and international affairs, policy synthesis and analysis are essential.

So, I was naturally drawn to G. David Garson’s chapter on Regulation and Taxation Issues. Regulation implies guidelines. Guidelines are found in policies. The policy of interest in this chapter is the Sherman Antitrust Act of 1890. This law (policy) states that it is illegal for corporations to engage in monopolistic conduct, come to price-fixing agreements, or otherwise act in restraint of trade. This is a policy that would seem to have been made for IT companies, despite the fact it was made decades before any significant IT company was formed. There would seem to be natural tendency of IT companies to become monopolies in the course of the development of technology. In the pursuit of the most efficient and effective technology, one looks to design the technology that eliminates the need for additional technology or the use of a substitute technology.

Garson lists IBM and Microsoft as the primary targets of the Antitrust Act. My focus will be on Microsoft. Microsoft was sued by the government as well as 20 states in 1998. It should also be noted that a parallel lawsuit would be filed by the European Union; it would eventually be settled. The domestic lawsuit was advocated by competitors of Microsoft who publish their own operating systems. The lawsuit was a response to  Microsoft’s decision to bundle Internet Explorer (IE) with their Windows operating system.  Considering that it is estimated that 90% of PC’s are equipped with Windows operating system, competition would have been effectively eliminated. Hence, a monopoly would have been created. Microsoft would claim that their bundling was innovative rather than anticompetitive.

U.S. District Court Judge Thomas Penfield Jackson would rule against Microsoft and order that the company be broken into two separate companies. Microsoft would appeal the ruling and win. However, Microsoft would have to make many concessions that would allow the competition to be able to function on a Widows platform.

Let’s fast forward to the anticipated release of Vista, the new operating system from Microsoft. There has been an official complaint filed by the European Union. The claim is that Microsoft violated the settlement that was made in 2004. It would appear that there are those who believe that Microsoft is attempting the unprecedented move of monopolizing the Internet. The markup language in Vista (XAML) is believed to be the replacement for HTML which, of course, is an industry standard used for publishing material online. This replacement would make the world dependent on this new operating system in order to utilize the Internet. Again this would be unprecedented dominance. Microsoft declined comment on the claims and complaints.

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