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UNITED STATES v. MICROSOFT: DID CONSUMERS WIN?

David Evans (), Albert L. Nichols and Richard Schmalensee

Journal of Competition Law and Economics, 2005, vol. 1, issue 3, 497-539

Abstract: United States v. Microsoft and the related state suit filed in 1998 appear to have concluded. In a unanimous en banc decision issued in late June 2004, the U.S. Court of Appeals for the D.C. Circuit rejected challenges to the remedies specified in a settlement reached in late 2001 and approved by the district court in November 2002. We examine the remedies imposed in the United States, in terms of both their relationship to the violations found and their impact on consumer welfare. We conclude that the remedies addressed the violations ultimately found by the Court of Appeals (which were a subset of those found by the original district court and an even smaller subset of the violations alleged, both in court and in public discourse) and went beyond them in important ways. The remedies imposed appear to have struck a reasonable balance between protecting consumers against the types of actions found illegal, on the one hand, and, on the other hand, avoiding excessive restrictions that would harm consumers by restricting Microsoft's ability to compete in pro-competitive ways.

Date: 2005
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Journal of Competition Law and Economics is currently edited by Damien Geradin, J. Gregory Sidak

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