The IBM and Microsoft Cases: What's the Difference?

FRANKLIN M. FISHER Massachusetts Institute of Technology (MIT) - Department of Economics

Abstract:

The Microsoft case has attracted more attention than perhaps any antitrust case in history - far more than the mammoth IBM case of the 1970's, with which it is sometimes compared. I was the chief economics witness for IBM in U.S. v. IBM and the chief economics witness for the United States in U.S. v. Microsoft.

I did not "switch sides". Even though both cases involved "bundling" and charges of "monopoly leveraging", the facts were different, and the principles of economic analysis led to different outcomes. In particular, Microsoft's actions did what IBM's could not have done -- excluded competitors by protecting an important barrier to entry into the market in which it held monopoly power.

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