Microsoft's Dominance Under Fire: A Critical Look at Judge Sporkin's Ruling

Strategic Insights -

Judge Stanley Sporkin's rejection of a deal between the US Government and Microsoft has given hope to those who want to break Microsoft's near-monopoly on personal computer operating systems. The deal was supposed to satisfactorily end a four-year federal investigation of alleged anticompetitive behavior by the company. However, Judge Sporkin found that the settlement was too narrow to break Microsoft's stranglehold on the market or to remedy its past "anticompetitive practices."

Key Takeaways:

  • Microsoft did not scale the heights by virtue of technical superiority, but rather by virtue of vision and ruthless execution. Bill Gates saw the potential of little computers early on and knew how to claw for advantage in contractual clinches.
  • The company has a history of anticompetitive practices, including predatory preannouncements, undocumented calls, and preferential access to operating system information for its own applications engineers.
  • Microsoft has doubled the price of its operating system to computer manufacturers within six months of the settlement's announcement.
  • The Federal Trade Commission retreated in disarray after two years of investigations into Microsoft's alleged monopolistic practices.
  • Judge Sporkin's rejection of the deal has led to hope that Microsoft's dominance can be broken, but the company's power and influence make this a challenging task.
  • Microsoft's latest ventures, including the $1.5 billion takeover of Intuit, may face legal challenges due to the company's history of anticompetitive behavior.
  • The resistance of Judge Sporkin is heroic, but his decision may be short-lived as the US Justice Department has asked an appeals court to move quickly to overturn the ruling.

Statistics:

  • 120 million PCs have Microsoft's MS-DOS and Windows systems installed (as of the article's publication date).
  • $1.5 billion: the cost of Microsoft's takeover of Intuit.
  • 1-2 years: the duration of the Federal Trade Commission's investigations into Microsoft's alleged monopolistic practices.
  • 6 months: the time it took Microsoft to double the price of its operating system to computer manufacturers after the settlement's announcement.
  • 4 years: the duration of the federal investigation into Microsoft's alleged anticompetitive behavior.

Sources:

  • "The New York Times" (no specific date mentioned)
  • "The Wall Street Journal" (no specific date mentioned)
  • [anonymously cited source]