The Microsoft Antitrust Case

The Microsoft Antitrust Case
A Case Study For MBA Students by Nicholas Economides* Revised April 2003

Abstract This case study discusses briefly the economic and legal issues pertaining to the antitrust case of the United States and a number of States against Microsoft.

* Stern School of Business, New York University, New York, NY 10012, (212) 9980864, fax [phone], http://www.stern.nyu.edu/networks/, [e-mail] Copyright ©, N. Economides

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Contents 1. 2. 3. 4. 5. 6. 7. Facts ............................................................................................................................. 3 Antitrust Law On Monopolization And Attempting To Monopolize .......................... 7 Economics Of Markets With Network Effects ............................................................ 9 The Issue Of Low Prices ............................................................................................ 12 DOJ’s Monopolization Theory................................................................................... 15 Effects On Consumers ................................................................................................ 17 Court of Appeals Decision ......................................................................................... 19 7.1 Analysis of the Court of Appeals Decision ......................................................... 20 1. Monopolization of the operating systems market for PCs .................................. 20 2. Attempting to monopolize the Internet browser market ...................................... 21 3. Tying Internet Explorer with Windows ............................................................... 21 4. Trial Proceeding and Remedy .......................................................................... 21 5. Judicial Misconduct by Judge Thomas Penfield Jackson .................................... 21 8. Final

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