|
1990 |
The
Federal Trade Commission launches a probe into
possible collusion between Microsoft and IBM |
|
1993 |
Frustrated by two Federal Trade Commission deadlocks, the Justice Department takes
over, focusing on Microsoft's DOS marketing practices.
|
|
1994 |
Microsoft settles antitrust charges with the Justice
Department, agreeing to stop using its operating system
dominance to squelch competition. |
|
1995 |
The Justice Department files suit to block a proposed
merger between Microsoft and Intuit, claiming the
marriage would quash competition in the finance
software market. Microsoft scraps its
merger plan. |
|
1997 |
August:
The Justice Department attempts to determine
whether the Microsoft's $150 million investment
in Apple Computer would squelch competition.
October:
The Justice Department files a complaint demanding a
$1-million-a-day fine against Microsoft. The
complaint claims Microsoft overstepped its bounds by
demanding PC manufacturers bundle the Internet Explorer Web
browser with their hardware products before being able to
obtain Windows licenses.
December:
In a preliminary injunction, Jackson orders Microsoft
to stop requiring PC makers to ship Explorer
with Windows, but he rejects the government's
request for the fine. |
|
1998 |
January:
Facing a contempt citation, Microsoft signs an
agreement giving computer makers freedom to install
Windows without an Explorer.
March:
An appeals court rules that
Microsoft can integrate whatever it wants into the OS
as long as it benefits consumers.
May:
The U.S. Justice Department files an antitrust suit
against Microsoft, charging the company with abusing
its market power to thwart competition.
|
|
1999 |
Judge Thomas Penfield Jackson issues his initial
findings of fact, finding that Microsoft held monopoly
power and used it to harm consumers, rivals, and other
companies. Mediation begins as both
sides meet with Judge Richard Posner to see if they
can settle the ongoing antitrust lawsuit. |
|
2000 |
January: U.S. Court of Appeals Chief Judge Richard
Posner ends efforts to mediate the trial.
April:
Microsoft officially responds to Judge Jackson's ruling, saying that widespread
competition precludes it from holding monopoly power, pointing to the AOL-Time
Warner merger as the main reason why the antitrust case should be thrown out. Government attorneys file
a proposed
punishment, urging Judge Jackson to split Microsoft into two separate companies
as penalty for breaking antitrust laws.
June: Judge
Jackson rules that the software giant violated
antitrust laws and consistently acted to hold onto its
power over industry competitors; he
orders the break up of Microsoft into
two companies.
Microsoft
appeals the ruling immediately.
September: A federal appeals court reverses the breakup
order. |
|
2001 |
June: The Supreme Court refuses to hear the
case. September: U.S. Justice Department says it no
longer seeks the breakup of Microsoft and proposes a quick settlement for the
antitrust case. |
|
2002 |
November: Judge Colleen Kollar-Kotelly rules that
the
proposed settlement serves the public's interest as required under the Tunney
Act, which sets standards of review for antitrust settlements. |
|
2003 |
August:
A special European Union commission details the case
against Microsoft in a confidential document known as
the “Statement of Objections" which accuses Microsoft
of behaving anti-competitively and recommends legal
action be taken. |
|
|
 ANOTHER
year, another antitrust showdown for Microsoft, the
world's biggest software company. It all sounds horribly
familiar. Once again, the company has fallen foul of
regulators who accuse it of exploiting the monopoly of
Windows, its desktop operating-system software, in order
to dominate adjacent markets. Four years ago, American
trustbusters argued that Microsoft had crushed makers of
rival web-browsers by building its own browser into
Windows, thus ensuring its ubiquity, since Windows is
installed on over 95% of PCs.
This time around, its opponent is the European Commission,
which is soon expected to issue a ruling that Microsoft
has done the same thing again with its media-player
software, and is using the dominance of Windows to
monopolize the market for software on bigger “server”
computers as well. The victims and the investigating
police force may be different, but the perpetrator, murder
weapon (Windows) and modus operandi are identical.
The European case is, in effect, a re-run of the American
case in which Microsoft was found guilty four years ago.
Two
conclusions can be drawn from this state of affairs.
First, it is clear that the settlement agreed with
America's trustbusters in 2002 has had little or no impact
on the firm's conduct. Although Microsoft was found guilty
of illegally “tying” its web-browser to Windows, and was
initially ordered to be broken in two, the far more
lenient settlement that was eventually agreed made no
attempt to prevent similar tying in future. The European
Commission has proposed two alternative remedies to
address the problem of tying: one would force Microsoft to
make a stripped-down version of Windows without various
add-ons, and the other would require Microsoft to include
rival firms' software with Windows. Both of these
remedies, however, have serious drawbacks. In the end,
Microsoft may well escape with just a fine and yet another
bundle of ineffective restrictions on its behavior.
|
Browser
views: |
 |
Netscape |
|
Statement by Chris Holton, manager of
Netscape's corporate public relations:
"What Netscape and many other
software companies want and what everyone in the world
should demand is a level playing field in the software
industry so people have choice. Without choice, we
would all wear the same shoes, buy the same make of
car, and have exactly the same software programs on
our computers."
"As we shift into the Digital Age
and use our computers to obtain news and do commerce
online, we run the risk of severely concentrating
control of distribution of goods and services,
including such vital services as news and banking
through one primary source, Microsoft."
"We believe enforcement of the
antitrust laws is necessary in order to keep our
economy open so that more than a single company can
compete fairly in the digital economy. It's a very
important public policy issue facing our country
today."
|
 |
Microsoft |
|
Microsoft's Jim Cullinan, manager of
corporate public relations in Redmond, Washington:
"This is a multibillion dollar industry, and there's
more venture capital going into software developers
than ever before. ... There's always tremendous
opportunity ... especially with competitors such as
Java. Linux, and Apple publicly talking about
replacing Windows, and Netscape rumored to upgrade and
expand."
"Every wave of innovation and integration creates
another wave of great ideas ... imagine if someone had
tried to stop innovation in automobiles in the 1920s,
or TVs in the 1950s ... in the same way no one should
try to freeze software innovation in 1998."
"All we
want is the freedom for Microsoft and other companies
to be able to innovate and integrate new features into
their products. Windows must evolve to incorporate
what its users want in an operating system, but that
doesn't mean Microsoft isn't allowing consumers a
choice on what software application to use." |
All of
which leads to the second conclusion: that Microsoft's
exploitation of its monopoly will continue as long as the
monopoly itself does. A likely candidate as its next
victim is Google, the company that dominates the
internet-search business. Another possibility is Apple,
current top-dog in the small but rapidly growing market
for legal music downloads with its iTunes software. This
week Microsoft launched a Google-like search “toolbar”,
and has stated its plans to build internet-search features
into Windows. Similarly, Microsoft plans to launch its own
online-music store later this year, tied to its
now-dominant media player. Expect the market share of
iTunes, currently at 70%, to plummet.
Isn't this
simply a matter of Microsoft competing vigorously? The
strange thing is that its products invariably succeed in
PC-based markets where the dominance of Windows provides
an advantage: office productivity, web-browsing, media
playback and servers. Yet in other markets that have
nothing to do with PCs, such as mobile phones, set-top
boxes and games consoles, the company is far less
successful. Odd, that.
This
newspaper has long argued, and still believes, that a
break-up of Microsoft is the only remedy that would have
any impact on its conduct, by removing its key weapon,
Windows. At the moment that seems out of the question. How
else might Microsoft be stopped from illegally exploiting
its monopoly? By the long-awaited rise of open-source
software such as Linux, maybe, though that seems unlikely.
Perhaps the company will eventually conclude that the
costs, in bad publicity and constant legal battles, of
maintaining its monopoly exceed the benefits, and choose
to divest or open up Windows itself. But that also seems
implausible when there are large monopoly rents to be had.
Some day a break-up of this too-mighty firm will again
have to be considered.
|
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Leadership Focus
