The Microsoft Antitrust Cases by Gavil Andrew I.;First Harry; & Harry First

Author:Gavil, Andrew I.;First, Harry; & Harry First [Gavil, Andrew]
Language: eng
Format: epub
Tags: Law, Antitrust, Technology, Engineering, History
ISBN: 9780262027762
Publisher: MIT Press
Published: 2014-08-15T00:00:00+00:00

7

The Challenge of Remedy

On December 28, 2007, Netscape announced in a blog entry that AOL would be discontinuing its support for Netscape’s browser, which AOL had acquired in 1999 for $10.2 billion. On March 1, 2008, AOL officially pulled the plug. Netscape didn’t live to see its fourteenth birthday.1

The report of Netscape’s death in 2008 was greatly exaggerated, however. Netscape had actually died in May of 1998, less than a year before it was acquired by AOL. As we have already seen, Judge Thomas Penfield Jackson declined to rule on the plaintiff governments’ request to preliminarily enjoin the distribution of Windows 98 bundled with Internet Explorer in favor of combining the preliminary injunction hearing with trial on the merits. As a result, a new generation of “Windows 98 computers” was produced, placing Microsoft’s browser and its browser icon on the desktops of millions of computer users. It would be another three years before any relief would be granted for Microsoft’s various efforts to exclude Netscape, and by then it didn’t matter—IE dominated the marketplace. The slow progress of the litigation had permitted the market to tip in Microsoft’s favor.

To be even more precise, however, Netscape didn’t completely die in 1998. Instead, it sowed the technological seeds for a competing browser by making its code into open source, a project it had begun even before it was acquired by AOL. In 2003 AOL spun off the development of this open-source software to the newly created Mozilla Foundation, which AOL supported financially, and Mozilla then developed an independent browser, Firefox. Firefox and Netscape (based on the same underlying code) began releasing versions with features that weren’t available in Internet Explorer, thereby gaining users. By 2007, 60 percent of users in one survey rated Firefox as the best browser. Only 11 percent rated IE as the best. By May of 2008—ten years after the monopolization cases were filed against Microsoft—Firefox accounted for about 18 percent of all browser use in the United States, but IE accounted for nearly 75 percent. More important, Microsoft also retained more than 90 percent of the market for desktop-computer operating systems, the market that Microsoft had illegally monopolized according to the findings of the district court eight years earlier.2

Although some of the new browser competitors talked of a “second browser war” that would be won by innovation rather than “monopolistic muscle,” monopolistic muscle was hardly out of the picture.3 On January 17, 2009, after a complaint from Opera (a browser company with less than 1 percent of the market), the European Commission announced that it had sent a Statement of Objections to Microsoft outlining its “preliminary view” that Microsoft’s tying of Internet Explorer to the Windows’ operating system was an abuse of dominant position in violation of Article 102 TFEU.4 At the same time a trade association filed a second complaint, alleging that Microsoft was refusing to disclose interoperability information “across a broad range of products,” including its office-productivity software. The Commission announced that it would be investigating that complaint as well.

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