Microsoft's Anti-Trust Settlement Thrown Out: A New Deal Looms

Strategic Insights -

A US judge, Stanley Sporkin, has rejected an anti-trust settlement deal between Microsoft and the US Department of Justice, deals a significant blow to the software giant's plans to escape relatively unscathed from a four-year investigation. The judge deemed the deal too narrow, allowing Microsoft to continue with certain anti-competitive practices. This decision has significant implications for the industry, with comparisons drawn to 1980s anti-trust actions against American Telephone and Telegraph and IBM.

Key Takeaways:

  • The US judge Stanley Sporkin rejected an anti-trust settlement deal between Microsoft and the US Department of Justice, deeming it too narrow and ineffective.
  • The deal allowed Microsoft to continue with certain anti-competitive practices, which the judge deemed unacceptable.
  • The ruling has significant implications for the industry, with comparisons drawn to 1980s anti-trust actions against American Telephone and Telegraph and IBM.
  • Microsoft should regard Judge Sporkin's ruling as an opportunity to reform and adapt, rather than a defeat.
  • The outcome of the new deal being thrashed out may prove a benefit for the industry and ultimately for Microsoft's founder, Bill Gates.

Statistics:

  • Michael Malone (Computerworld, 1990) reported that AT&T was forced to shed its regional phone companies, ending its near monopoly of the US phone network.
  • The breakup of AT&T has led to a powerful and efficient telecom group, while IBM is struggling to turn its empire back into a profitable business.
  • The impact of Judge Sporkin's ruling on Microsoft's personal fortune is minimal, with a few million dollars reduced due to the fall in Microsoft shares.

Sources:

  • Malone, M. (1990, October 29). "AT&T Settlement Tied to House Vote." Computerworld.
  • Financial Times, October 26 issue.