If you have paid attention to anything technology relate drecently, you have probably seen headlines like these.Anti trust regulation is gaining a lot of traction in the media as well as in the Department of Justice.But in general, we have started to see what has been broadly termed a tech lash.A lot of concern about the role of technology as well asthe size of these companies and the impact that they may behaving on individuals in society.Since May 2019, the DO J has opened antitrust probes intothe likes of Apple, Google and Facebook.The last major antitrust action against a major company occurred more than two decades ago .Remember Internet Explorer?
Microsofts browser has since been eclipsed by the likes of Googles Chrome and Apple Safari.But it was once so powerful the federal government had to step in. Heres what happened.In 1994, Microsoft was on top of the blossoming tech industry. Its operating system was fast becoming the go-to software for professionals and casual computer users alike.But if you wanted to get on the Internet in the early 90s,you were using this.Netscape Navigator.Software which makes it easy for people to connect theglobal computer network called the Internet.Netscape Navigator was the king of Web browsers at thetime, but there was a downside.You had to pay $49 to install Netscape on your computer,the equivalent to about $85 dollars today.You could also choose from AOL or Prodigy, but those cost $9.95 a month.But these options were still light years ahead of Microsoftat the time.Microsoft didnt even have internet connectivity built intoits software until the mid 90s.But the new wave of popularity surrounding Navigator wasrea son enough for Microsoft CEO Bill Gates to pen a letterto the company in 1995 titled The Internet Tidal Wave.With this document, Gates laid out his vision of the Internet. He wanted Microsofts development teams to,quote, go overboard on Internet features.
Gates also laid out seven broad examples of the ways thecompany could conquer the Internet.One specific example, Microsoft needed a Web browser.Fast forward to the second half of 1995, and Microsoft released its brand new Windows 95 operating system, as wellas Internet Explorer 1.0.But they were separate.They were not bundled until 1996 as part of Windows first major update and this changed the game for Microsoft.It was a new way to get online without any extrainstallation. It came with the operating system.And best of all, Microsoft had the advantage of being amassive company that could offer its software for free.And it was a massive success.In just over a year, Microsoft gained 10 percent market share. This, of course, sent other companies revenuesplummeting. But I eat success might not have been purely from the popularity of Windows.Allegations that Microsoft began making it incredibly difficult to install other Web browsers began to surface.The allegations were enough to spark a DO J antitrust probe into Microsoft in 1998.The antitrust case against Microsoft was a bit different to how the law was used in the past.Before cases were based on one central issue: Was adominant company charging super high prices without anyone to compete with. But this case changed that.
The DOJ argued that Microsoft stifled competition by usingits sheer size to barge into the browser wars.It could offer Internet Explorer for free, included in theOS and Netscape would be cut out of the business from thevery first time the computer was turned on.If you suppress your competitors innovation and youre theonly game in town, and you keep suppressing innovation,surely thats the harm to competition.In fact, its one of the biggest harms to competition andits been known in economic field for all these years thatsuppressing innovation is even worse than raising pricesbecause youre preventing the progressive movement of themarkets.On top of that, if a person wanted to install Netscape onthe computer. Microsoft allegedly made it incrediblydifficult to do so.Microsoft, on the other hand, argued that people chose touse its operating system because it was simply better thanthe competition. But Microsoft lost.
The court ruled that the company had to split its softwareand operating system divisions in order to abide byantitrust regulation, at least at first.That decision was later thrown out in appeals court, rightas the Bush administration settled into the White House.By the time a settlement had been reached in 2001,Microsofts position in the browser wars was already beingeaten away by competition from the likes of MozillaFirefox, an offshoot of Netscape.Internet Explorer wasnt the only antitrust battle thatMicrosoft faced, Novell was a company specializing innetwork computing and software in the early 80s and 90s.The company was also known for its word processingsoftware, WordPerfect.The company complained in 2004 that Microsoft intentionallymade it difficult to install its software, just like it didwith IE. But Novells case spent a decade bouncing aroundthe courts.Unlike the United States v.Microsoft case that came before it, Novell lost.An appeals court said that Microsofts actions didntconstitute antitrust behavior.And the Supreme Court declined to take up the case in 2014.
Those two cases are really in great tension with each otherbecause the U.S. against Microsoft, as I would say, theopposite point of view, that a firm with market power doeshave a duty to deal fairly and not anti-competitively withthose who want to use its platform.Novell was acquired in 2014 and by then had left the wordprocessing business.Its unclear whether an antitrust case brought against techgiants today would rule in the same vein as United Statesv. Microsoft or more like Novell v.Microsoft.If U.S. against Microsoft is giving credence above Novellagainst Microsoft, it has a lot to say on controlling thealmost unaccountable power of the Big Tech firms.Accusations that Apples App Store stifle competitionresemble arguments that Microsoft prevented downloads ofother applications. And Google Chrome is now the king ofInternet browsers. Big Tech companies are also swallow ingup startups and smaller firms left and right.The tech world has become a winner-take -all affair.Tech mergers have faced particular scrutiny, especially incon gressional hearings.When a company owns four of the largest six entitiesmeasured by active users.We have a word for it. And thats monopoly, or at least Monopoly power.
The Big Tech executives might beg to differ.We face intense competition for all of the products and services that we provide to name a few examples.Twitter, Snap chat, i Message, Skype, Telegram,Google, YouTube and Amazon are for photo and video sharing,messaging, advertising and other services that compete with Facebook.Theres also concern that antitrust regulation remains toobroad to tackle techs problems.Antitrust is a sledgehammer where even if you have some concerns about specific policy issues such as privacy, whatyou really need is more of a scalpel.So it is this very powerful tool.And breaking up could result in things like breaking up teams that make innovation more difficult.So as Congress, the public and Big /tech itself startcalling for more regulation, Microsofts past antitrust troubles could hint at whats ahead.