Antitrust, Innovation, and Product Design in Platform Markets: \u3ci\u3eMicrosoft\u3c/i\u3e and \u3ci\u3eIntel\u3c/i\u3e

The Antitrust Division’s Microsoft case and the Federal Trade Commission’s Intel case both rested on claims that antitrust intervention was necessary to preserve innovation in technological platforms at the heart of the personal computer. Yet, because those very platforms support markets that are among the most innovative in the American economy, injudicious intervention might well have jeopardized the very innovation that antitrust should promote. In this article, we review the role of platforms in technological innovation and consider how antitrust standards should apply to them. We then examine how Microsoft resolved antitrust issues affecting platform design at various stages of the litigation and show how that experience informed the allegations and the settlement in Intel. We are particularly concerned with the parallel claims in the two cases that Microsoft and Intel each used its control over the design of a dominant platform to hinder innovations that might have made a complementary product a better substitute for the platform. This exercise should help guide future applications of monopolization standards to high technology platforms

Antitrust, Innovation, and Product Design in Platform Markets: \u3ci\u3eMicrosoft\u3c/i\u3e and \u3ci\u3eIntel\u3c/i\u3e

The Antitrust Division’s Microsoft case and the Federal Trade Commission’s Intel case both rested on claims that antitrust intervention was necessary to preserve innovation in technological platforms at the heart of the personal computer. Yet, because those very platforms support markets that are among the most innovative in the American economy, injudicious intervention might well have jeopardized the very innovation that antitrust should promote. In this article, we review the role of platforms in technological innovation and consider how antitrust standards should apply to them. We then examine how Microsoft resolved antitrust issues affecting platform design at various stages of the litigation and show how that experience informed the allegations and the settlement in Intel. We are particularly concerned with the parallel claims in the two cases that Microsoft and Intel each used its control over the design of a dominant platform to hinder innovations that might have made a complementary product a better substitute for the platform. This exercise should help guide future applications of monopolization standards to high technology platforms

Software Development as an Antitrust Remedy: Lessons from the Enforcement of the Microsoft Communications Protocol Licensing Requirement

An important provision in each of the final judgments in the government\u27s Microsoft antitrust case requires Microsoft to make available to software developers the communications protocols that Windows client operating systems use to interoperate natively (that is, without adding software) with Microsoft server operating systems in corporate networks or over the Internet. The short-term goal of the provision is to allow developers, as licensees of the protocols, to write applications for non-Microsoft server operating systems that interoperate with Windows client computers in the same ways that applications written for Microsoft\u27s server operating systems interoperate with Windows clients. The long-term goal is to preserve, in the network context, the platform threat to the Windows monopoly that was the focus of the government\u27s theory of monopolization. The platform threat was the possibility that middleware, like Netscape\u27s browser or Sun\u27s Java technologies, might evolve into a platform for other applications and thus erode the applications barrier to entry that protects Windows. This was the threat that the courts held Microsoft illegally thwarted by its contracts and product design. The protocol licensing provision rests on the assumption that middleware running on servers might also pose a platform threat to the Windows monopoly of client operating systems. District Judge Kollar-Kotelly, in entering the final judgments, singled out this provision as the key to assuring that the other provisions do not become irrelevant as more applications move to servers in local networks or the Internet. The provision has, however, proven to be by far the most difficult to implement. We argue in this Article that the provision has not accomplished its purpose and that courts and policymakers can draw some hard lessons from the experience.[...] We begin our analysis by briefly describing the liability holdings and the ensuing remedial proceedings in the Microsoft litigation. In the process, we provide an overview of the final judgments and the reasoning the courts offered for upholding them and rejecting any broader relief. We then narrow our focus to the communications protocol licensing provision, explaining its history, requirements, rationale, and mechanism of enforcement. We then analyze the administration of the program from its inception in 2003 to the most recent joint status report. In the final part, we argue that the program has failed because it violates basic principles of remedial design and implementation in monopolization cases

Measuring Compliance with Compulsory Licensing Remedies in the American Microsoft Case

Section III.E of the final judgments in the American Microsoft case requires Microsoft to make available to software developers certain communications protocols that Windows client operating systems use to interoperate with Microsoft\u27s server operating systems. This provision has been by far the most difficult and costly to implement, primarily because of questions about the quality of Microsoft\u27s documentation of the protocols. The plaintiffs\u27 technical experts, in testing the documentation, have found numerous issues, which they have asked Microsoft to resolve. Because of accumulation of unresolved issues, the parties agreed in 2006 to extend Section III.E for up to five more years. Microsoft\u27s continuing failure to resolve the plaintiffs\u27 issues, despite its commitment of enormous resources to the project, led the district judge in January 2008 to extend the other provisions in judgments for at least two years. Paradoxically, however, there is no evidence that software developers cannot use the protocols because of the issues generated in the plaintiffs\u27 testing program. In this article, we argue that the court abandon the unresolved issues as its standard of compliance and ask instead whether Microsoft has provided documentation and technical support that meet the standards of the market and needs of real-world developers

Software Development as an Antitrust Remedy: Lessons from the Enforcement of the \u3ci\u3eMicrosoft\u3c/i\u3e Communications Protocol Licensing Requirement

An important provision in each of the final judgments in the government\u27s Microsoft antitrust case requires Microsoft to make available to software developers the communications protocols that Windows client operating systems use to interoperate natively (that is, without adding software) with Microsoft server operating systems in corporate networks or over the Internet. The short-term goal of the provision is to allow developers, as licensees of the protocols, to write applications for non-Microsoft server operating systems that interoperate with Windows client computers in the same ways that applications written for Microsoft\u27s server operating systems interoperate with Windows clients. The long-term goal is to preserve, in the network context, the platform threat to the Windows monopoly that was the focus of the government\u27s theory of monopolization. The platform threat was the possibility that middleware, like Netscape\u27s browser or Sun\u27s Java technologies, might evolve into a platform for other applications and thus erode the applications barrier to entry that protects Windows. This was the threat that the courts held Microsoft illegally thwarted by its contracts and product design. The protocol licensing provision rests on the assumption that middleware running on servers might also pose a platform threat to the Windows monopoly of client operating systems. District Judge Kollar-Kotelly, in entering the final judgments, singled out this provision as the key to assuring that the other provisions do not become irrelevant as more applications move to servers in local networks or the Internet. The provision has, however, proven to be by far the most difficult to implement. We argue in this Article that the provision has not accomplished its purpose and that courts and policymakers can draw some hard lessons from the experience

Software Development as an Antitrust Remedy: Lessons from the Enforcement of the Microsoft Communications Protocol Licensing Requirement

An important provision in each of the final judgments in the government\u27s Microsoft antitrust case requires Microsoft to make available to software developers the communications protocols that Windows client operating systems use to interoperate natively (that is, without adding software) with Microsoft server operating systems in corporate networks or over the Internet. The short-term goal of the provision is to allow developers, as licensees of the protocols, to write applications for non-Microsoft server operating systems that interoperate with Windows client computers in the same ways that applications written for Microsoft\u27s server operating systems interoperate with Windows clients. The long-term goal is to preserve, in the network context, the platform threat to the Windows monopoly that was the focus of the government\u27s theory of monopolization. The platform threat was the possibility that middleware, like Netscape\u27s browser or Sun\u27s Java technologies, might evolve into a platform for other applications and thus erode the applications barrier to entry that protects Windows. This was the threat that the courts held Microsoft illegally thwarted by its contracts and product design. The protocol licensing provision rests on the assumption that middleware running on servers might also pose a platform threat to the Windows monopoly of client operating systems. District Judge Kollar-Kotelly, in entering the final judgments, singled out this provision as the key to assuring that the other provisions do not become irrelevant as more applications move to servers in local networks or the Internet. The provision has, however, proven to be by far the most difficult to implement. We argue in this Article that the provision has not accomplished its purpose and that courts and policymakers can draw some hard lessons from the experience.[...] We begin our analysis by briefly describing the liability holdings and the ensuing remedial proceedings in the Microsoft litigation. In the process, we provide an overview of the final judgments and the reasoning the courts offered for upholding them and rejecting any broader relief. We then narrow our focus to the communications protocol licensing provision, explaining its history, requirements, rationale, and mechanism of enforcement. We then analyze the administration of the program from its inception in 2003 to the most recent joint status report. In the final part, we argue that the program has failed because it violates basic principles of remedial design and implementation in monopolization cases