The Microsoft Antitrust Case
In 1998 the Microsoft Corporation was at the center of an investigation by the U.S. Department of Justice (DOJ) which alleged the company of violating the Sherman Act. The Sherman Act is considered the foundation of federal antitrust litigation, and is used to “combat anticompetitive practices, reduce market domination by individual corporations, and preserve unfettered competition as the rule of trade” (www.law.cornell.edu). The DOJ concentrated on 4 specific violations of the Act, (1) Microsoft engaged in “unlawful exclusive dealings and other exclusionary agreements”, (2) Microsoft engaged in “unlawful tying”, which was the act of Microsoft tying together two products (Windows and Internet Explorer), (3) Microsoft ‘illegally maintained its monopoly of the PC operating systems market, and (4) Microsoft attempted to monopolize the Internet. (Baron, p. 313).
The two most obvious stakeholders in the case are Microsoft and the DOJ. Microsoft is in the position of not only protecting its products from stricter regulation, but is also interested in keeping the competition at bay- which is the crux of their defense against the claims of the DOJ. Microsoft maintained the position that becoming a monopoly in an industry as dynamic as computer technology is next to impossible given how quickly things and products can change. The DOJ’s interest extends to ensuring there is an adequate level of competition in the industry. Other entities with a concern in the situation are Java, Sun Microsystems, Netscape, Apple, and Intel. Netscape and Java were a particular threat to Microsoft due to the ease and adaptability of their Internet browsing software, which could be used without the Windows operating system thus giving consumers a choice as to which system they wanted to utilize.
The first question posed by the case is whether or not the DOJ should have brought an antitrust case against Microsoft,...