Antitrust case tried during 1998
In a celebrated antitrust case tried during 1998, The Department of Justice charged Microsoft Corporation with a wide range of anti-competitive behavior. Among the charges leveled by the DOJ was the allegation that Microsoft illegally bundled the sale of its Microsoft Explorer Internet browser software with its basic Windows operating system. DOJ alleged that by offering a free browser program Microsoft was able to extend its operating system monopoly and substantially lessen competition and tend to create a monopoly in the browser market by undercutting rival Netscape. Microsoft retorted that it had the right to innovate and broaden the capability of its operating system software over time. Moreover, Microsoft noted that Netscape distributed its rival Internet browser software Netscape Navigator free to customers, and that it was merely meeting the competition by offering its own free browser program.
• Did Microsoft’s bundling of free Internet browser software with its Windows operating system violate U.S. antitrust laws? Is combining one product with another a violation of the provisions of the Sherman Act? Discuss.
• Did Microsoft’s bundling of Microsoft Explorer with Windows extend its operating system’s monopoly and substantially lessen competition? Discuss.
• Did Microsoft, as a result of these practices, create a monopoly in the browser market?
• Has society benefitted from Microsoft software? Isn’t true that Microsoft’s software has helped make personal computers more accessible and more affordable to millions? Discuss.
You may want to watch Bill Gates’ deposition available (part 1) at https://www.youtube.com/watch?v=m_2m1qdqieE and (part 2) at https://www.youtube.com/watch?v=TyM7RpU6cHc . You may also want to use material at the Department of Justice Antitrust Division: United States v. Microsoft Corporation, available athttps://www.justice.gov/atr/cases/ms_index.htm