Microsoft Antitrust Case

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The Trial Begins Contd...

He also maintained that Microsoft's aggressive pursuit of new businesses could not possibly mean doom for its competitors. There was no assurance that Microsoft would succeed in any new market, much less dominate it. The emergence of Netscape's popular Navigator browser and Sun Microsystems's Java programming language, both of which Gates saw as threats to Windows, showed that the industry was highly competitive. He remarked, "No one has a guaranteed position."

The Verdict In June 2000, the US District Court gave its ruling that Microsoft had violated the US antitrust laws by abusing its monopoly power in computer operating systems. Judge Jackson ruled that Microsoft was a monopoly, basing his conclusion on three factors: Microsoft's share of the market for operating systems was extremely large and stable; a high entry barrier protected Microsoft's dominant market share and; because of the high entry barrier, Microsoft's customers lacked a commercially viable alternative to Windows. Jackson ordered that the company be split into two smaller companies, one for the Windows operating system, and another for its Internet and other businesses, to prevent it from violating state and federal antitrust laws in the future. Another remedy suggested by some experts was the mandatory licensing plan. This would require Microsoft to auction off the Windows source code - the underlying software commands that made the product work.

Two or three other companies would then create their own versions of the OS. Mandatory licensing of the source code, however, had its own problems. Some analysts held the view that few would licence it from Microsoft and compete with the software giant. They observed that the licensee company would have to establish, "a massive development and distribution system to compete with Microsoft - which already has a smoothly running machine and knows every secret about Windows." Some experts, however, considered this plan to be far simpler than trying to dismantle the whole company.

In a report published in April 1999, Business Week emphasized that a structural remedy would be preferable to a conduct remedy. Traditionally, US antitrust policies had laid emphasis on monitoring bad conduct rather than on breaking up monopolies. A conduct remedy would involve restrictions on Microsoft's behavior such as limiting the features that could be built into the Windows operating system.

Such a remedy would probably need tight supervision and monitoring by the government for several years to come. Business Week argued it was precisely because Microsoft had not conformed to a conduct remedy prescribed by a 1994 consent decree, that antitrust proceedings had to be started again in 1998. Business Week added, "Government supervision of Microsoft would set a bad precedent.

Since Microsoft has its finger in virtually every high-tech pie, any monitoring of it would necessitate the regulation of its relations with other companies as well. The result would start a slippery and deadly slope to Government micro-management of the hi-tech sector." A structural remedy on the other hand would involve licensing of Windows or the breaking up of Microsoft into two or more smaller entities.

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