What Facebook, Google and Others Can Learn From Microsoft’s Antitrust Case | WSJ

TL;DR

The tech giants can learn from Microsoft's antitrust case in terms of how to approach investigations, the importance of consumer harm, and the influence of global jurisdictions.

Transcript

• [Narrator] In the summer of 2019, the United States put Silicon Valley in its crosshairs. - Only a small number of the nearly two billion apps in the app store are made by Apple. - We have rolled out many innovations over the course of the history of our product. - For every $3 of advertising spent online, a business would have to spend an equiva... Read More

Key Insights

• 😀 Tech leaders should approach antitrust probes with humility to avoid negative perceptions like Bill Gates and Microsoft faced.
• 🥶 Free products can still harm consumers, especially when it comes to data privacy and treatment.
• 🧑‍💻 The U.S. government isn't the only test for tech giants, as European regulators have been more aggressive in pursuing antitrust cases.
• 💼 Microsoft's case demonstrates the potential for fines and the importance of competition for both competitors and consumers.
• 👶 Tech companies will argue that the landscape has drastically changed since Microsoft's case, with new players like Google and Facebook emerging.
• 🙈 The influence of the EU in shaping global competition law standards cannot be ignored.
• 🥺 The outcome of these investigations could lead to significant changes in the tech industry, as seen with Microsoft's loss of market share.

Questions & Answers

Q: How did Bill Gates' behavior impact Microsoft's antitrust case?

Bill Gates' contemptuous and evasive behavior during his deposition negatively impacted the case's outcome. The judge expressed negative opinions of Gates and Microsoft, and in his decision, called for the company to be broken up.

Q: How did Microsoft harm consumers with its free Internet Explorer browser?

Microsoft bundled Internet Explorer with Windows 98 for free but abused its market power by favoring its products and excluding rivals. This demonstrated that companies can still harm consumers, even when offering free products.

Q: How have state attorneys general and European regulators reacted to big tech antitrust violations?

State attorneys general recommended a move towards stronger enforcement by the U.S. government. European regulators have fined Google and opened investigations into Facebook and Amazon. The EU has a broader approach to antitrust cases and has played a leading role in setting global standards.

Q: How has Microsoft's market position changed since its antitrust case?

Microsoft's dominance in the operating system market has decreased, with only a 35% market share currently. Internet Explorer also lost its dominant share of the web browser market to Google Chrome. These changes highlight the dynamic nature of the tech industry.

Key Insights:

• Tech leaders should approach antitrust probes with humility to avoid negative perceptions like Bill Gates and Microsoft faced.
• Free products can still harm consumers, especially when it comes to data privacy and treatment.
• The U.S. government isn't the only test for tech giants, as European regulators have been more aggressive in pursuing antitrust cases.
• Microsoft's case demonstrates the potential for fines and the importance of competition for both competitors and consumers.
• Tech companies will argue that the landscape has drastically changed since Microsoft's case, with new players like Google and Facebook emerging.
• The influence of the EU in shaping global competition law standards cannot be ignored.
• The outcome of these investigations could lead to significant changes in the tech industry, as seen with Microsoft's loss of market share.
• The tactics and strategies employed by tech giants during these investigations will greatly impact their future.

Summary & Key Takeaways

• The United States put Silicon Valley in its crosshairs in 2019, similar to how it targeted Microsoft in the past.

• Microsoft's antitrust case in 1998 involved allegations of stifling competition by leveraging market power.

• Lessons from the case include the importance of humility in responding to investigations, the understanding that free products can still harm consumers, and the influence of both U.S. and European jurisdictions.