Gil-Moltó, Maria J. --- "Economic Aspects of the Microsoft Case: Networks, Interoperability and Competition" [2010] ELECD 483; in Rubini, Luca (ed), "Microsoft on Trial" (Edward Elgar Publishing, 2010)

Book Title: Microsoft on Trial

Editor(s): Rubini, Luca

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848442443

Section: Chapter 11

Section Title: Economic Aspects of the Microsoft Case: Networks, Interoperability and Competition

Author(s): Gil-Moltó, Maria J.

Number of pages: 25

Extract:

11. Economic aspects of the Microsoft
case: networks, interoperability
and competition
Maria J. Gil-Moltó

1. INTRODUCTION

Microsoft has been under scrutiny of both the Department of Justice
in the United States and the European Competition Commission in the
European Union in two complex cases that spanned over a number of
years. These cases have been followed with great interest by economists,
both academic economists and practitioners, all around the world. This
is perhaps due to the fact that the computing industry is an industry in
which a number of economic arguments such as network effects, com-
plementarities and R&D incentives interplay and affect the effective level
of competition. In fact, there is a feeling among economists that we can
learn a lot about strategic behaviour in rapidly changing environments by
understanding Microsoft's strategies.1
In the EC case, two of Microsoft's strategies were investigated: first,
Microsoft's refusal to supply the essential information to make Sun
Microsystems's work group server operating system, Solaris, compatible
with Windows. This investigation followed the formal complaint by Sun
Microsystems to the European Commission, in which it accused Microsoft
of behaving anti-competitively by denying this necessary information.
Microsoft was accused of trying to reduce the interoperability of Windows
with other products produced by competitors in order to leverage its
market power in the PC operating systems market onto the work group
server operating systems market, a market in which Microsoft was also
active.
The second issue involved in the ...