Is Microsoft still a monopoly?
15 years ago the Federal Government brought an antitrust suit against Microsoft, alleging monopolistic and predatory behavior. The company had been giving away Internet Explorer with its Windows 95 operating system, thus assuring itself victory in the browser war that it was fighting with Netscape. Most users were surprised. Why should the government attack a company for giving away its product?
The proceeding took about two years, ending in a settlement where Microsoft shared some of its programming code with other software developers. Browsing programs proliferated. Currently there are four major browsers, with several minor platforms out there.
The fight for share between Microsoft and Google (Chrome), Apple (Safari), and Mozilla (Firefox) has led to more innovation, with features like improved privacy protection, accelerators, and tabbing now standard. And these browsers are still free. So was the government’s anti-trust suit justified? The initial order to break Microsoft up was reversed on appeal. Based on how the breakup of AT&T ended, sharing the code seems to have worked out better for consumers.
Adam Smith noted that big businesses do conspire against the public, often using government regulation to do so. When it comes to browsers, increased competition has helped us all.
Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!