When you think of monopolies, examples like Standard Oil or AT&T might come to mind. However, one of the largest and most popular corporations in the world today was on the brink of being broken up on grounds of being a noncoercive monopoly. Microsoft, which is one of if not the largest software producer in the world, was almost shut down in 2001 during the case of United States v. Microsoft Corp.
In 2001, the U.S. Government accused Microsoft of holding a monopoly over the PC market and maintaining their monopoly by preventing consumers from using various other internet services through technical restrictions. The main issue in the case was whether or not internet explorer could be combined with windows operating systems as a whole. Microsoft had used technical restrictions to limit consumers from uninstalling internet explorer or attempting to use other browsers like Netscape or Java. The Department of Justice, eighteen states, and the District of Columbia all brought lawsuits against Microsoft, the trial of which began in 1998.
The charges brought against Microsoft focused on illegally thwarting competition through the tech restrictions and forcing internet explorer to consumers at the expense of other browsers. An article from The Department of Justice on the findings of the court reads as follows: “Furthermore, Microsoft expends a significant portion of its monopoly power, which could otherwise be spent maximizing price, on imposing burdensome restrictions on its customers — and in inducing them to behave in ways — that augment and prolong that monopoly power”
Although Microsoft technically lost the lawsuit, they of course were not broken up by the government. Instead, a settlement was reached, and Microsoft was required to share its programming applications with third party companies. Even though Microsoft is arguably the largest tech corporation in the world today, you wouldn’t think that they were almost broken up two decades earlier. While the settlement was widely seen as merely a scolding, it goes to show that even tech giants like Microsoft aren’t immune to the consequences of attempted monopoly power.
References
U.S. Department of Justice, Civil Action No. 98-1232 (TPJ), United States v. Microsoft Corp. U.S. V. Microsoft: Court's Findings Of Fact (justice.gov)
Hello David. I really enjoyed reading your post, and I always find examining this particular case about Microsoft to be fascinating. One little-known move that Microsoft made before this gigantic lawsuit from the government was investing $150,000,000 into its rival Apple (Martin, 2019). Many people thought the move was confusing because it saved Microsoft's competition from going bankrupt; however, as many experts explain this move was vital for Microsoft to avoid having an even bigger punishment from the Department of Justice (Martin, 2019). I love reading about the Microsoft case because it demonstrates how much influence the government has over these companies and what would have happened if the United States had not intervened with Microsoft.
Reference
Martin, C. (2019, January 31). Did Bill Gates save Apple from bankruptcy or Microsoft from the law? Moneycontrol. https://www.moneycontrol.com/news/trends/did-bill-gates-save-apple-from-bankruptcy-or-microsoft-from-the-law-3461191.html