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The Microsoft Antitrust Case Essay

9428 words - 38 pages

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) 998- 0864, fax (212) 995-4218, http://www.stern.nyu.edu/networks/, neconomi@stern.nyu.edu Copyright ©, N. Economides

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Contents
1. Facts ............................................................................................................................. 3 2. Antitrust Law On Monopolization And Attempting To Monopolize .......................... 7 3. Economics Of Markets With Network Effects ............................................................ 9 4. The Issue Of Low Prices ............................................................................................ 12 5. DOJ's Monopolization Theory................................................................................... 15 6. Effects On Consumers ................................................................................................ 17 7. 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 Settlement.......................................................................................................... 22 8.1 Summary of Proposed Microsoft Settlement of November 6, 2001 ................... 22
A. Provisions seen as favorable to Microsoft ........................................................ 22 B. Provisions seen as favorable to the plaintiffs ................................................... 22 C. Duration ............................................................................................................ 23 D. Conclusion ........................................................................................................ 23
9. Further Reading .......................................................................................................... 23 10. Questions For Students ........................................................................................... 24 11. References ............................................................................................................... 25

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