Evolution of Software Antitrust


The antitrust decree issued against Microsoft in 2002 is schedule to expire in November of 2007. Several states and the District of Columbia are attempting to extend the decree beyond its current expiration date, to 2012.

The states argue that the decree has not been effective in reducing Microsoft's market share. Microsoft opposes any extension, arguing that the decree has nothing to do with market share, but with regulating the software firm's competitive practices. Particularly, Microsoft was held accountable for its "tying" of the Internet Explorer web browser to the Windows operating system.

There is no question that Microsoft is still dominant in the web browser and operating system markets. However, open-source products and Apple have also made headway into that dominance. The Firefox web browser has been a success and APple is making a new push with it's Safari web browser. In operating systems, some Linux distributions are making headway, led by some "user-friendly" distributions, such as Ubuntu. Apple has also been aggressively competing for additional market share in the OS market, particularly among home users.

Bottom Line: In the five years since the consent decree the software industry has changed radically. While Microsoft continues to be dominant in the market there is little question that reasonable software alternatives are available. There is little reason to extend the decree when the market has changed so dramatically, particularly given that Microsoft will remain under an "unofficial" watch by business and consumers.

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