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A Critical Appraisal of Remedies in the EU Microsoft Cases

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Abstract

We discuss and compare the remedies in the two cases antitrust cases of the European Union (EU) against Microsoft. The first EU case alleged (i) that Microsoft illegally bundled the Windows Media Player (WMP) with Windows; and (ii) that Microsoft did not provide adequate documentation that would allow full interoperability between Windows servers and non-Microsoft servers as well as between Windows clients and non-Microsoft servers. After finding Microsoft liable and imposing a large fine, the EU imposed as remedies the requirements on Microsoft (i) to sell a version of Windows without WMP (Windows-N); and (ii) to publish and license interoperability information. Windows-N was a commercial failure, and there has been only limited cross-platform server entry. In its second investigation of Microsoft, the EU alleged illegal tying of Internet Explorer (IE) with Windows. The EU settled with Microsoft with Microsoft undertaking the obligation to ask (through compulsory Windows updates) consumers whose computers have Internet Explorer pre-installed to choose a browser from a menu of competing browsers. Thus, the EU imposed quite different remedies in the two cases: an unbundling remedy for the WMP but a close to a must-carry requirement for IE. We analyze and compare the different approaches.

Suggested Citation

  • Nicholas Economides & Ioannis Lianos, 2009. "A Critical Appraisal of Remedies in the EU Microsoft Cases," Working Papers 09-29, NET Institute, revised Dec 2009.
  • Handle: RePEc:net:wpaper:0929
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    File URL: http://www.stern.nyu.edu/networks/Economides_Lianos_Critical_Appraisal_Microsoft_Remedies.pdf
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    Keywords

    antitrust; remedies; Microsoft; complementarity; innovation; efficiency; monopoly; oligopoly; media player; interoperability; Internet browser;

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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