The Microsoft Anti-Trust Case, in Retrospect

DOJ supervision of Microsoft remedies ended May 12

In April 2000, U.S. District Court Judge Thomas Penfield Jackson ruled Microsoft violated federal and state antitrust laws. The company was ordered to split into two companies, decouple its operating system and browser technology, pay hefty fines, and undergo years of scrutiny to prevent future market monopolizing.

 ... except it didn't happen that way. The break-up order didn't survive appeal, which limited the remedies to a set of rules to keep Microsoft from punishing equipment makers who sold rival products and restricted the company from withholding APIs to third-party developers.

Netscape, the key stakeholder in the trial, is gone. Internet Explorer - with a significantly decreased market share despite Microsoft not being broken into "baby bill's" - is competing with browsers such as Firefox, Safari, and Google Chrome. And this past week, the U.S. Department of Justice remedies supervision ended, closing the case.

Today the discussion is not about browser wars, but open source, mobile computing, virtualization, and the cloud. These weren't even blips on the horizon in 2000.

And in fact, some even postulate if we'll ever see anything like the Microsoft antitrust case again. With the benefit of hindsight, the feeling is that the Microsoft "remedy" was overly extreme. Microsoft managed to remain one company, but it didn't crush the rest of the industry. The reason Microsoft isn't an antitrust thread anymore is because other companies have out-innovated our friends in Redmond.

• Look at Apple. Apple was on the brink of extinction in 1997 when Microsoft financially bailed it out. Today the company has created the iEverything of products that now dominate consumer electronics and is moving into the enterprise with the iPhone and iPad.
• Don't forget Google, which wasn't even on the radar screen in 1997, but is now the #1 firm in consumer search and - along with Apple - has taken over the market for mobile operating systems. Google was born in 1998 while the government watching  Microsoft, and grew under that evil empire's nose to acquire markets Redmond would love to dominate.
• And there's Amazon, the company that went from an online bookseller to a major enterprise technology provider. 

Did the government help Apple, Google, and others by "watching Microsoft like a hawk" and making sure it didn't step out of line? Probably not (although one can presume Microsoft's investment in Apple was a move to fend off the government). Those companies succeeded because they either forged or beat the competition (primarily Microsoft) to new markets, and out-smarted and out-innovated a company in Redmond that had become a bit complacent. You can thank the market for that, not the government.

And that is why there probably won't be another government crackdown in the technology industry the way there was with Microsoft. Microsoft is crying foul about Google's behavior and market share, but that doesn't mean the government is going to repeat what they did in the late 1990s. (Sorry, Microsoft)

Technology is all about innovation, and innovation can come from anywhere (and out of nowhere). Apple's "reign" as the king of the mobile market disappeared once Google got going with Android. There's no guarantee someone else won't come along and unseat Google as the #1 search provider.

It's all about innovation and market share.

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