<Could anyone give me in a short one or two paragraph digest
a) what was Microsoft charged with;
b) what was it convicted of; and
c) what was the remedy proposed.
i.e. what sin against neoclassical orthodoxy did it transend.>
Very simply, Microsoft was charged with being a monopoly and engaging in
anticompetitive behavior. (Under the antitrust laws, you can be a monopoly
as long as you do not engage in any anticompetitive behavior.) When it
comes down to it, the alleged anticompetitive behavior they are accused of
was entering into illegal "tying" arrangements. They told the computer
manufacturers (Dell, IBM, Gateway, etc.) that if you want the Windows
operating sytem, you have to include the Internet Explorer application with
the package (i.e. they "tied" the purchase of Windows, in which they held a
monopoly, to the purchase of Explorer, in which they did not have a
monopoly, thereby unfairly increasing their monopoly profit). Microsoft
did so because they were concerned that if Netscape became too popular,
computer users could eventually run their computers straight off the
internet and not require Windows.
The Judge found that the requirement that Explorer be included with Windows
was an illegal tying arrangment and he agreed to the remedy proposed by the
Department of Justice -- the separation of Microsoft into two separate
companies: (1) one that developes and markets the operating system
(Windows), and (2) one that develops and markets applications (Word,
Explorer, etc.).
David Shemano
