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Microsoft Corp.

Microsoft Faces Off Against Justice Department in Landmark Antitrust Trial

Strategic Insights

— 1 min read

The outcome of Microsoft's trial is expected to transform the technology landscape as the company faces off against the Justice Department in the next phase of its landmark antitrust trial. Microsoft will argue that the computer industry remains highly competitive, specifically highlighting America Online's $10 billion purchase of Netscape Communications Corp. and AOL's push to gain faster Internet access for its 17 million customers. However, this strategy is seen as a high-risk move by some legal experts, who argue that Microsoft's own deal-making activities, including its $20 billion cash hoard and $5 billion investment in AT&T Corp., could undermine its legal arguments.

Key Takeaways:

  • Microsoft will focus on AOL's deal with Netscape to demonstrate the industry's competitiveness, but this strategy is considered high-risk.
  • The company has made significant investments in cable television, wireless telephones, telecommunications software, and the online health-care industry using its $20 billion cash hoard.
  • Experts say Microsoft's strategy suggests it may be fortifying its case against any punishing remedies before the presiding judge's decision.
  • The company's argument that mergers change the technology landscape bolsters its argument that it doesn't have monopoly power.
  • The Justice Department claims that Microsoft has used its dominance in personal computer operating software to stifle competition in emerging technologies like browsers.
  • Critics say Microsoft will control the future of computing if it is allowed to crush rivals such as Netscape.

Statistics:

  • Microsoft's cash hoard: $20 billion
  • AOL's purchase of Netscape Communications Corp.: $10 billion
  • Microsoft's investment in AT&T Corp.: $5 billion
  • Microsoft's investment in wireless carrier Nextel Communications Inc.: $600 million
  • Number of Microsoft's strategic positions in cable television, wireless telephones, telecommunications software, and the emerging online health-care industry: Not specified

Sources:

  • "Microsoft Faces Off Against Justice Department in Landmark Antitrust Trial" by JUBE SHIVER JR., LOS ANGELES TIMES WASHINGTON
  • Quote by William E. Kovacic, an antitrust specialist who teaches law at George Washington University:
  • Quote by Ernest Gellhorn, an antitrust specialist and law professor at George Mason University:
  • Quote by Tim O'Rourke, a veteran Washington antitrust lawyer:

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