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The three-year long antitrust litigation against Microsoft seems to be drawing to a close. The terms of the proposed settlement between the US Department of Justice are milder than the earlier ruling of breaking up Microsoft into two distinct companies. Microsoft, no wonder is delighted at this turn of events. A more important question, however, is about the interests of the consumers, are they going to have a fair deal?
Microsoft, the great icon of the American industry has finally come out unscathed and in one piece from the antitrust muddle. The software giant has been in the middle of antitrust litigation since 1998, when the US Government and 18 states accused it of abusing its monopolistic power to stifle competition in the software market. Microsoft reached its nadir in June 2000, when the district court judge, Penfield Jackson passed a ruling to break it into two distinct entities. But all that is past now, it has steered itself clear from the prospect of being divided and what it is in store for it is a much milder and friendlier settlement, much to the disappointment of its competitors. The US Department of Justice (DoJ) reached a settlement with the software giant Microsoft in November 2001. The settlement is supported by nine of the 18 states while the remaining half are going in for appeal.
The settlement coming after a series of negotiations between Microsoft and the DoJ thus brings a sense of relief to the company transforming its failure into a victory. The settlement upholds the fact that Microsoft has repeatedly abused its monopoly power. But leaves it with nothing more than a mild rebuke. The agreement has no concrete steps that are directed at either punishing Microsoft for its past activities or imposing restriction on it in the future.
During the trial many charges were hurled at Microsoft. It was blamed for the fact that it bundled its Internet Explorer with Windows Operating System (OS), used its clout to force PC makers to choose Windows by providing them with concessions and price reductions on installing its OS. It was also blamed for stifling competition in the software industry through such practices. Microsoft, on its part had maintained that it had no monopoly in the highly competitive computer software industry and that its business practices were simply responses to the highly competitive environment. Microsoft further argued that it was no more than a single minded and relentless competitor and that it had not crossed the limits of law. Evidence such as incriminating
e-mails as to Microsoft's intention to wipe out its competitors however added fuel to the fire. Judge Jackson was thus convinced that Microsoft was a monopoly in PC operating systems market, where its Windows OS enjoyed more than 90 percent share. Though he admitted to the fact that the bundling of Internet Explorer and Windows was to the advantage of the consumer (Microsoft charges nothing additional for its Internet Explorer, whereas its nearest competitor Netscape was charging $50 for its Netscape Navigator in 1998), he also believed that Microsoft's actions would be detrimental to the competitive environment in the computer software industry.
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