Friday, U.S. District Judge Thomas Penfield Jackson released a document in the Microsoft antitrust case indicating he sees Microsoft as a monopoly that has abused its power to maintain its stranglehold on the personal computer operating system industry.
In a 207-page legal document released Friday evening, Jackson stated Microsoft is a monopoly and that the company has used its power to stifle possible competitors. Although the document is not the final verdict in the case, it clearly indicates Jackson is sympathetic to the government’s case, while finding Microsoft’s defense sorely lacking in substance.
Finding that Microsoft has the ability to set prices for its product with impunity, in addition to acting as the operating system in more than 85 percent of personal computers, the judge stated Microsoft “enjoys monopoly power in the relevant market.” This finding is particularly important because monopolies are subject to more restrictions than most companies.
The judge found Microsoft used its monopolistic power to harm competitors and to maintain and increase its huge market share. One case cited was Microsoft’s treatment of personal computer giant IBM. The judge wrote, “when IBM refused to abate the promotion of its own products that competed with Windows … Microsoft punished the IBM PC Company with higher prices, a late license for Windows 95 and the withholding of technical and marketing support.”
The findings are promising for the entire computer industry. A huge portion of the price of personal computers is allocated to pay for the Windows operating system. If other operating systems begin to proliferate, the cost of computers is likely to drop off drastically, expanding the market as more consumers are able to afford the cost of a computer.
Today, a few companies offer non-Windows computers, but worries of compatibility and the uncertainty of the unknown has limited sales. However, the mere existence of these computers indicates the effect the antitrust case has had both on Microsoft and the entire computing industry. Until recently, it was almost impossible to find a computer running on something other than Windows unless it was an Apple. A little over a year after the Microsoft antitrust case began, Apple is having enormous growth, and other operating systems such as Linux are beginning to enjoy name recognition among the general public.
When Bill Gates created Windows, there is no doubt it was a major innovation. Microsoft is a company that has earned a major portion of the market by creating innovative products that are easy to use by the general population. However, in recent years, that innovation has decreased while predatory practices seem to have increased. Rather than attempting to win market share with the strength of its products, Microsoft has instead tried to eliminate competition by forcing computer manufacturers to follow restrictive contracts and stop promoting competitors’ products. Jackson’s findings create a clear case against Microsoft and demonstrate the importance of creating checks on monopolistic power.