Über die Autorinnen und Autoren

John E. Lopatka is the A. Robert Noll Distinguished Professor of Law at the Pennsylvania State University's Dickinson School of Law.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

The Microsoft Case

Antitrust, High Technology, and Consumer WelfareBy William H. Page John E. Lopatka

The University of Chicago Press

Copyright © 2007 The University of Chicago
All right reserved.
ISBN: 978-0-226-64463-9

Contents

Preface..........................................................................................ix1 Origins.......................................................................................1Ideological Sources of Antimonopolization Law....................................................2Microsoft's Predecessors: The Public Monopolization Case.........................................4Microsoft's Beginnings: A Post-Chicago Convergence...............................................192 Decisions.....................................................................................33Chronology.......................................................................................34The Liability Decisions..........................................................................35The Remedial Decisions...........................................................................70The Follow-on Private Litigation.................................................................78The European Commission Decision.................................................................803 Markets.......................................................................................85Two Systems of Belief about Operating Systems and Middleware.....................................86Network Effects and Related Economic Concepts....................................................91Defining Software Markets........................................................................964 Practices I: Integration......................................................................115A Preliminary Skirmish...........................................................................119Integration on Trial.............................................................................123Rethinking and Redefining Integration under Sherman Act Standards................................1295 Practices II: The Market Division Proposal, Exclusive Contracts, and Java.....................167The Market Division Proposal.....................................................................168The Exclusive Contracts..........................................................................184Java.............................................................................................1916 Remedies......................................................................................203The Goals of Antitrust Remedies..................................................................204Structural Remedies..............................................................................205Conduct Remedies.................................................................................212Damage Remedies..................................................................................224Aftermath........................................................................................243Notes............................................................................................249Index............................................................................................331

Chapter One

Origins

United States v. Microsoft is part of a long tradition of public monopolization enforcement that began in the late nineteenth century and gained a renewed urgency in the latter years of the New Deal. That tradition, however, was interrupted in the early 1980s, when the Antitrust Division of the U.S. Department of Justice voluntarily dismissed its case against IBM and settled its case against AT&T. Those administrative decisions reflected the influence of the Chicago School of antitrust analysis, which had cast doubt on populist ideas about the consequences of large firms' competitive practices, ideas that had shaped the law of monopolization, especially since the New Deal. Cases in the post-New Deal era had seemed to condemn firms that succeeded too well by achieving dominant market shares without any taint of predation. After the IBM case, courts and enforcement officials endorsed hard competition even by dominant firms. Microsoft, however, revived the tradition of the public monopolization case. A confluence of trends in economic theory and in high technology markets made complaints about Microsoft's competitive strategies both plausible and important.

Ideological Sources of Antimonopolization Law

Congress passed the Sherman Act in 1890 in response to vast business combinations known as trusts that had emerged in an earlier "new economy," the period of explosive growth in industry and transportation that followed the Civil War. The records of the congressional debates on the statute, though voluminous, tell us little about its meaning and purpose. Congress evidently saw the trusts as a problem, but understood the problem poorly and had no clear idea how to solve it. The eventual statute prohibited "monopolization" along with contracts, combinations, and conspiracies "in restraint of trade." These terms echoed the language of the ancient common law of monopolies and restraints of trade, but delegated to the federal courts the daunting task of formulating more specific standards of liability and determining which practices violate them. As Senator John Sherman admitted, the meaning of the act "must be left for the courts to determine in each particular case."

Congress did intend to make one innovation-public and private rights of action. Under the common law, courts generally declined to enforce agreements in restraint of trade; a few states went further, revoking the corporate charters of monopolistic combinations. But the law offered no right of action for damages or injunction to those injured by illegal restraints. The Sherman Act, in contrast, made monopolization and restraints of trade both crimes and civil wrongs and authorized public and private enforcement actions in federal court. The public civil remedy presumably was included to provide a weapon against large-scale combinations such as the trusts, whose resources dwarfed those of other private litigants. Whether intended or not, the public monopolization case became a primary instrument of economic and social policy.

Unfortunately, as we will see shortly, many public monopolization cases have actually inhibited competition, the very process they were supposed to foster. In this respect, they have exemplified the phenomenon Robert Bork famously called the "antitrust paradox"-the historical tendency of antitrust law to work against its own ideals. Public choice scholars have sought to explain this paradox by arguing that the Sherman Act, despite its public interest guise, was enacted to protect inefficient firms. One scholar, for example, argues that the Sherman Act must have been passed to protect small firms from the more efficient trusts because most trusts formed in markets in which output was increasing and prices were declining. Other scholars have found evidence that agricultural interests exerted much of the political pressure for enactment of state antitrust legislation. These studies shed light on the political origins of an undeniable protectionist theme in antitrust law. They do not, however, show that the collective purpose of a unanimous Congress in passing the Sherman Act was to protect special interests.

Neither the legislative history nor the broad language of the statute identifies special...