Lessons from Microsoft's antitrust adventure for today's Big Tech giants
Monday June 24, 2019. 05:07 PM , from BoingBoing
With trustbusting in the air and Big Tech in the crosshairs, Bloomberg's Dina Bass reflects on the antitrust case against Microsoft in the 1990s, which the company bungled badly (but still survived, thanks to a judiciary in thrall to a bizarre theory of antitrust that has no problem with monopolies).
Bass uses the Microsoft case to come up with some general advice for the Big Tech companies, and there's some revealing truth in the advice that inadvertently points the way to a better future for antitrust and also answers some of the critics of trustbusting.
For example, Bass advises companies 'Don't even put up a fight about whether you have a monopoly' -- because modern, post-Reagan antitrust is incredibly monopoly-friendly, there's no reason not to enthusiastically admit to having one. Just argue that your monopoly isn't doing anything illegal (like raising prices) and you'll do just fine (some legal scholars beg to differ), but in any event, it's a good reason to revisit the post-Reagan consensus on antitrust).
Bass also cites Microsoft President and Chief Legal Officer Brad Smith lamenting 'the distraction the case caused, and cited it as a reason the company missed out on the search market,' and also unnamed experts who have 'pinned Microsoft's abysmal performance in mobile computing partially on constraints and distractions from the case.'
Another way to look at this is that it validates the theory of modern trustbusters, which holds that even if company breakups are likely to be tied up in courts for years, they still do good, by disciplining monopolists so they don't crush new entrants into the market lest it hurt their antitrust case (or draw the attention of the trustbuster who is currently raking their competitor over the coals).
In an interview last year at the Code Conference, Microsoft President and Chief Legal Officer Brad Smith lamented the distraction the case caused, and cited it as a reason the company missed out on the search market -- the business that fueled the runaway success of Google, now under the microscope itself. Others have pinned Microsoft's abysmal performance in mobile computing partially on constraints and distractions from the case. Some of the company's business missteps can fairly be attributed to poor execution and strategic errors that had nothing to do with the government dispute. Still, the notion that merely fighting an antitrust battle may do almost as much harm as losing one brings us to our last point.
- Consider settling early. It's hard to say with certainty what the late 1990s and early 2000s might have looked like for Microsoft had it found a way to settle with the government earlier than 2002. Still, for the government's current targets, it's worth weighing a settlement against the impact of several years of investigation, a possible loss in court and potentially harsher restrictions or remedies. Amazon, Apple, Facebook and Google probably have a pretty good idea of what regulators may object to, and it's worthwhile for them to consider ways to assuage those concerns while keeping the core of their businesses and future ambitions intact. The alternative is years of investigations, possibly damaging evidence and testimony, and ample distraction, all leading up to what could be a devastating loss in court.
Microsoft's missteps offer antitrust lessons for tech's Big Four [Dina Bass/Bloomberg]
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