Many view the Microsoft case as an important precedent that will serve as a guideline for the necessary role of government in the information age. Given the dynamic and ever-changing nature of the technology industry, there is much concern among economists, legal specialists,and policymakers on the "appropriate" role that government should subsume in the information economy; an economy which appears to be defying traditional economic principles of the industrial economy. Despite the final outcome of the Microsoft Antitrust Case through the.
appeals process, the case presents a wide range of legal, economic, and political challenges that policymakers will need to understand in formulating policies in the technology industry.
CASE OVERVIEW.
Although the Microsoft case in its current form officially began in 1996, Microsoft has been under the scrutiny of the federal government since 1990. At that time, the Federal Trade Commission launched an investigation into Microsoft's pricing policies and its possible impact on stifling competition. In addition, the FTC was assessing the creation of hidden codes in Microsoft's operating system that were intended to hamper the activities of Microsoft's competitors. No action was taken again Microsoft by the FTC and eventually resulted in a deadlock in 1993 when the FTC decided to drop the case. At the same time, the Department of Justices announced that it was taking over the FTC's investigation of Microsoft. In the early nineties, Microsoft perceived the government's inquiry into the company's activities as primarily instigated by Microsoft's competitors in Silicon Valley. Bill Gates believed that the legal scrutiny by the government into Microsoft's activities was unjustified and an inappropriate intrusion harming Microsoft's consumers and stockholders. After continued inquiry into Microsoft's practices, Microsoft signed a consent decree in July of 1994 that required Microsoft to change the length of certain licensing and contract agreements as well as alter its method of collecting royalties from manufacturers of personal computers that use Microsoft's products.