Microsoft, Google and Antitrust: Similar Legal Principles in Different Periods

The Justice Department is arguing in a federal antitrust case that Google is a dominant technology company that abused its market power to bully industry partners, protect its monopoly and stifle competition.

It has a familiar ring to it. US et al. v. Google goes to trial this week, with unmistakable echoes of the landmark federal case against Microsoft a quarter-century ago. In the Google case, like Microsoft, a technology company was accused of using its enormous market power to unfairly cut competitors off from potential customers.

But prior to the Google trial, it seemed inconceivable that the case would garner as much attention as Microsoft’s actions did. In the late 1990s Microsoft was a unique technology titan and its chairman, Bill Gates, was a national icon.

Microsoft’s trial, which began in October 1998, involved 76 days of testimony over eight months. Every major news outlet covered it. The New York Times reported on the daily activities.

It’s a test that mostly deals with brain concepts like “network effects” and “switching costs.” However, the Times provided daily coverage normally reserved for very few courtroom dramas over the years, such as the OJ Simpson trial and the Lindbergh kidnapping trial.

For several days, there were whirlwind sessions on the court steps. Microsoft representatives will say the government provided isolated snippets of text that, taken out of context, are certainly not evidence of anti-competitive behavior. The judiciary and attorneys for the states involved in the cases will often say that the damning testimony speaks for itself.

Microsoft was found by a federal judge to have repeatedly violated the nation’s antitrust laws. An appeals court upheld that decision, but was skeptical that the government’s preferred solution — breaking up the company — would.

In its case against Google, the Justice Department points to the Microsoft case and that company’s tactics in the 1990s. “Google is using the same playbook,” the government declares, by illegally leveraging its strength in online search as Microsoft does with its personal computer operating system, Windows.

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But Kent Walker, Google’s head of global affairs, said there are big differences between the Microsoft of the dot-com boom and the Google of today. Then, Mr. Walker was deputy general counsel for Netscape, a commercial pioneer of Internet browsing software that was a key target of Microsoft’s pro-competitive campaign.

90 percent of personal computers used Microsoft’s Windows software, the main gateway to the young Internet, and Microsoft controlled the software and services featured on those Windows PC screens.

On the other hand, Mr. Walker said. Its agreements with companies like Apple and Samsung to make Google the default search engine on their smartphones is legal and benefits consumers, giving them better technology and reducing costs for device makers and their customers, he said.

“We think aspects of the Microsoft case will be very helpful for us here,” said Mr. Walker said in an interview.

When Microsoft’s experiment began, it was the high tide of early Internet ecstasy. E-commerce was just taking off and every industry wanted to jump on the digital bandwagon. This was before mobile computing. The first BlackBerry, primarily an email device, was introduced in 1999. It wasn’t until 2007 that the iPhone launched the smartphone era. If you wanted to get online, you probably did it with a computer running Windows.

Microsoft was rich, powerful and ambitious. It started moving beyond software. In 1996, it entered the media business in a partnership with NBC, the cable channel, MSNBC, and a website, msnbc.com (Microsoft divested its stake several years later).

Executives in the industry worry about what Microsoft might do next, a sentiment expressed by News Corp chairman Rupert Murdoch: “Everybody in the communications business is paranoid about Microsoft, myself included.”

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Today, Google is not as big as Microsoft was. It is a member of the Big Tech Club. It’s an undisputed giant in search and online advertising, and its software and artificial intelligence capabilities can extend to other industries. But its big tech peers — Amazon, Apple, Meta (Facebook) and Microsoft — have all come under scrutiny in the U.S. and abroad.

Mr. The Microsoft case also had a large personal dimension because of Gates’ status. He was the world’s richest man, and at the time of the trial, Mr. Gates’ stake in Microsoft rose to $100 billion as the stock market soared. In 1995, a researcher at the Massachusetts Institute of Technology, Mr. To track Gates’ net worth, Bill Gates created a website called Personal Wealth Clock.

Mr. Polls show that Gates is widely admired as a great entrepreneur. He was Microsoft’s chairman, deeply involved in the company’s operations and especially its Internet strategy. Colleagues said he saw the government’s desperate bid as an attack on his life.

Mr. Gates did not testify at the trial, but portions of his videotaped testimony were shown. He inquired, did not answer and forgot. At one point, he didn’t understand the term “market share”. (The immediate joke is that “share” is a concept he doesn’t understand.)

Later, Microsoft officials, Mr. Gates said he followed the legal advice he was given to avoid short questions and broad or answerable answers. If so, that is ill-advised. His testimony undermined his credibility — and Microsoft’s — with the judge.

Google’s founders, Sergey Brin and Larry Page, played a much less prominent role in the current case. They are no longer deeply involved in the organization. Sundar Pichai, chief executive of Google’s parent company Alphabet, joined Google in 2004 and rose through the ranks to become a thoughtful, soft-spoken company man.

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Although the legal theory presented by the Justice Department mirrors that used in the Microsoft case, the outcome of the trial, Judge Amit P. of the U.S. District Court for the District of Columbia Based on evidence submitted to Mehta.

The government has already suggested that the Microsoft case lacks clear language. There’s no equivalent of “cutting off Netscape’s air supply” or piles of e-mail filled with unhinged words.

In the Google case, the government cited the search company’s instructions to avoid words like “kill,” “crush” and “block” in its employees’ emails.

“Google has learned one thing from Microsoft — to choose its wording carefully to avoid antitrust scrutiny,” the Justice Department wrote.

For its part, the government has borrowed heavily from the Microsoft case in its case against Google, said William Kovacic, a law professor at George Washington University and former chairman of the Federal Trade Commission. .

After the George W. Bush administration took office, the Justice Department and Microsoft reached a settlement. The resulting consent decree prohibited Microsoft from imposing restrictive covenants, freed PC makers to install and feature other companies’ software, and forced Microsoft to release additional technical information.

Many criticized the consent decree as toothless. David Yoffey, a professor at Harvard Business School, was initially a critic, but his views have changed.

Today, Mr. Yoffie teaches a course on antitrust and technology that begins with the Microsoft Consent Decree. “There were activities that were no longer possible because of the consent decree,” he said. “This limited Microsoft’s ability to pursue newcomers, not those who were trying to compete head-on with Microsoft, but from an angle.”

A leading user of a more open environment, Mr. Yoffi said that Internet search started with new technology and then a new business model. It was called Google. It was installed in September 1998, a month before Microsoft began testing.

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