UNITED STATES V. MICROSOFT: DID CONSUMERS WIN?

United States v. Microsoft and the related state suit filedin 1998 appear to have concluded. In a unanimous en banc decisionissued in late June 2004, the U.S. Court of Appeals for theD.C. Circuit rejected challenges to the remedies specified ina settlement reached in late 2001 and approved by the districtcourt in November 2002. We examine the remedies imposed in theUnited States, in terms of both their relationship to the violationsfound and their impact on consumer welfare. We conclude thatthe remedies addressed the violations ultimately found by theCourt of Appeals (which were a subset of those found by theoriginal district court and an even smaller subset of the violationsalleged, both in court and in public discourse) and went beyondthem in important ways. The remedies imposed appear to havestruck a reasonable balance between protecting consumers againstthe types of actions found illegal, on the one hand, and, onthe other hand, avoiding excessive restrictions that would harmconsumers by restricting Microsoft's ability to compete in pro-competitiveways.