South Carolina Drops Out of Microsoft Antitrust Case, Cites Competitive Marketplace

Strategic Insights -

South Carolina's Attorney General, Charlie Condon, announced on Monday that his state is withdrawing from the federal government's antitrust case against Microsoft Corporation, citing recent events that demonstrate competition in the high-tech field is alive and well. Condon's decision was influenced by the announcement of America Online's plan to acquire Netscape Communications Corporation and form an alliance with Sun Microsystems Inc., which he believes proves the competitive forces are working in the Internet marketplace. Condon took aim at the Clinton administration's Justice Department, criticizing its handling of the case and saying that consumers have not taken a leading role in the action. The Justice Department dismissed the effect of South Carolina's decision on the case, saying it will have zero impact on the case.

Key Takeaways:

  • South Carolina's Attorney General, Charlie Condon, has announced that his state is withdrawing from the federal government's antitrust case against Microsoft Corporation.
  • Condon cited America Online's plan to acquire Netscape Communications Corporation and form an alliance with Sun Microsystems Inc. as the central reason for his decision.
  • The announcement is seen as a blow to the Clinton administration's Justice Department, which had been a key partner in the case.
  • Condon believes that recent events have proven that the competitive forces are working in the Internet marketplace, making further government intervention unnecessary.
  • The Justice Department dismissed the effect of South Carolina's decision on the case, saying it will have zero impact on the case.
  • 19 states, including Illinois, remain partners with the Justice Department in the landmark antitrust case.
  • The trial resumes on Tuesday, despite South Carolina's withdrawal.
  • Charles Condon's decision was influenced by Nobel laureate Milton Friedman's warnings that greater government control over the high-tech industry could harm innovation and profits while raising prices to consumers.
  • Condon also criticized the Clinton administration's Justice Department, saying: "Over the last year, it has become clear that the government's case has been about Internet competitors, not about consumers."

Statistics:

  • 19 states remain partners with the Justice Department in the landmark antitrust case.
  • $4.2 billion - The value of the transaction in which America Online plans to acquire Netscape Communications Corporation.
  • Microsoft makes the other popular Internet browser, in addition to the one made by Netscape.
  • The trial resumes on Tuesday, despite South Carolina's withdrawal.

Sources:

  • "Washington _ Microsoft Europe CEO Says Internet Has Changed the World ", Charlie Condon, Washington, dated unknown.
  • "Chicago Tribune", dated July 7, 1998.
  • Press conference transcript with Bill Gates, dated July 6, 1998, Knight Ridder/Tribune Information Services.
  • "Microsoft Europe CEO Says Internet Has Changed the World", July 6, 1998, Chicago Tribune, Knight Ridder/Tribune Information Services.