Microsoft's Anti-Competitive Practices: A Deeper Dive

Microsoft's court case in the United States has ignited a heated debate over its anti-competitive practices. As policy adviser Simon Carne highlights, the company's requirement for computer manufacturers to install its own internet browser as a condition for using its Windows operating system is at the heart of the issue. Critics argue that this practice is a deliberate attempt to stifle competition, while Microsoft claims it is simply a business decision.

The truth, however, lies in the software giant's interests as a monopolistic operating system manufacturer. In a hypothetical world where operating systems and applications are separate businesses, it would be in the best interest of the operating system manufacturer to encourage competition among applications to increase demand and drive innovation. This is precisely what Microsoft has been doing - using its market power to limit competition and ensure its own applications remain dominant.

Key Takeaways:

• Microsoft's operating system business and applications business have always been separate, but recent actions suggest a shift towards anti-competitive practices.
• The competition authorities should ask whether a deal that rewards Microsoft for its refusal to license competing applications would be lawful in a hypothetical world where the two businesses are separate.
• In this hypothetical world, a merger between Microsoft's operating system business and its own applications business would be rejected by the competition authorities due to the anti-competitive implications.
• Exclusive deals between Microsoft and its own applications business would be anti-competitive and likely to be struck down by the competition authorities.
• In the real world, Microsoft's operating system business has traditionally been happy to do business with all applications manufacturers, including those that competed with its own applications.
• The only reason for Microsoft to enforce exclusive deals for its own applications business is to deny access to competing applications manufacturers, which would be anti-competitive.

Statistics:

• 90% of the market would be denied to competing applications manufacturers if Microsoft enforces exclusive deals for its own applications business.
• Microsoft's operating system business and applications business were separate until recently, suggesting a shift towards anti-competitive practices.
• Microsoft's market power has enabled it to limit competition and ensure its own applications remain dominant.

Sources:

• Simon Carne, policy adviser to regulators in the UK and internationally.
• United States Department of Justice court case against Microsoft.