Microsoft's Dominance: A Case of Increasing Returns and National Interest

Microsoft's quest for dominance in the IT sector is not simply a matter of economies of scale, but rather a complex issue of increasing returns, where its products become more attractive due to their widespread use. This phenomenon has sparked concerns about the company's business practices, with allegations of predatory conduct and a need for proper investigation. The ongoing case against Microsoft by the Department of Justice may not necessarily prove the company has broken antitrust laws, but rather that it has operated outside agreed-upon terms. As the world waits to see how America will approach this "national champion," the implications of Microsoft's dominance are far-reaching, with potential consequences for global competition law.

Key Takeaways:

• Microsoft's increasing returns have led to allegations of a "natural" monopoly, with the company retaining its position despite market or government pressure.
• The case against Microsoft brought by the Department of Justice need not establish that the company has broken antitrust law, but rather that it has operated outside the terms of an earlier agreement.
• The rest of the world is waiting to see how America will approach the Microsoft case, with potential implications for global competition law.
• Microsoft's "national champion" status has sparked concerns about the company's business practices, including allegations of predatory conduct.
• The case highlights the need for a global system to address truly international issues, such as Microsoft's dominance.
• The World Trade Organisation's resistance to introducing competition law remit may lead to a plethora of actions and standards around the world or leave Microsoft unchecked.

Statistics:

• Microsoft's market share of the global operating system market is estimated to be around 90% [1].
• The company's increasing returns have led to widespread use of its products, making them more attractive to consumers and businesses.
• The Department of Justice's case against Microsoft may not establish that the company has broken antitrust law, according to the terms of the agreement [2].
• The World Trade Organisation's resistance to introducing competition law remit may lead to a plethora of actions and standards around the world.

Sources:

• [1] "The simple idea that lies behind Microsoft's aim to rule the world", The Economist, 19 February.
• [2] The Department of Justice's case against Microsoft, referenced in The Economist article.