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There's More Than One Way to Bust a Trust

Posted by tadelste on · 4 comments
Inc. Magazine, December 2005; By Robert Litan 		Mail this story
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The news that Microsoft settled one of its last remaining antitrust lawsuits in October presents an opportunity to review the whole episode and assess what it means for the next generation of business innovators. The matter is of special interest to me. Working at the Justice Department in the mid-1990s, I helped lead the first investigation of Microsoft.

Before we get to the lessons learned, a brief recap: It goes without saying that Microsoft's rise to power on the strength of its operating systems for desktop PCs is one of the great American business success stories of all time. But as I argued a decade ago, the company abused its extraordinary power to cement its dominance in the operating systems market. Then it attempted to extend its monopoly into new markets, including Web browsers and online media players.

Courts in the U.S. and Europe found that Microsoft broke the law. After Justice won its most celebrated case, which concerned Microsoft's efforts to destroy Netscape's browser business, I argued in amicus curiae briefs that Microsoft should be split into three Windows companies. This would have restarted competition in the operating systems market and, in my view, would have led to better bug-free desktop operating systems than are now available.

Unfortunately, antitrust enforcement can be slow and unreliable. The Bush Justice Department was less interested in reining in Microsoft than Clinton's was. But though the company avoided a breakup, it did have to pay several billion dollars to settle related claims, and it is now subject to various restrictions on the way it does business.

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Comments (4)

dinotrac ·
The traction achieved by Firefox is nothing short of amazing, and a perfect example of competition coming out where you least expect it.

Microsoft's free (as in gratis) browser owned a monopoly on the internet, which is a fair characterization when one product by one company controls more than 90% of the market.

How on earth could anybody possibly compete with that? The thing came with the OS. It didn't cost of dime. Using IE was a no-brainer.

And yet Firefox continues to gain steam against that monopoly.

Why? Because it's better and people know both how to get it and use it.

Microsoft did what monopolies do...it ceased to invest seriously in IE. Compared to Firefox, IE is a nasty, ugly, slow and creaky mess. If a number of web sites hadn't been coded specifically for IE, it's market share might be in complete free-fall by now.

Office is next. Office costs real money. Office makes real money. But, honestly, Office ain't that great...and it sure is hard to see how it's getting any better in ways that are meaningful to me. Microsoft will try to get as much from as little as it can, but this is another monopoly that is destined to fall by the wayside. If enough OpenDocument tools crop up -- tools that allow users to mix and match best-of-breed components, and, taking advantage of the wide-open and completely documented document format, integrate their own custom apps into the mix, Office will be revealed for the creaky and restrictive mess that it really is. It will die on the vine.

All of this, however, takes time. Desktops are many times harder to win than server rooms.
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Abe ·
Dino,

You seem to be on a very good roll with your latest posts. Is that really you? What did the trick? keep it up and avoid "murkying up"!.lol
dinotrac ·
Abe -

I don't know. I think I'm saying pretty much the same things I always say.

Sometimes, I think, the starting point makes a difference.

With this article, I can agree and extend, which probably makes the post seem more positive than saying the same thing in response to something that I don't agree with in part or in whole.

At any rate, thanks.

Oh -- Abe -- just for you:

Have a Murkey Christmas, unless you're one of those Hazy Holidays types!

;0)
Abe ·
Nothing is hazy about the Holidays, I celebrate all of them no matter what they are called.

You too have a Merry Christmas and happy new year. looking forward for a more prosperous FOSS year.

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