NewsByte 7 September 2001

Pendulum Swings to Microsoft, But How Far?

By Steve Lohr, New York Times (Courtesy Yahoo!)

The Bush administration, by adopting a measured, conservative approach in the Microsoft (news/quote) antitrust case, clearly increased the chances that the two sides would reach a settlement. The Justice Department yesterday made a crucial concession in dropping the charge that it has been illegal for Microsoft to pursue its longstanding practice of bundling, or tying, new software to its monopoly product - the industry-standard Windows operating system. William H. Gates, Microsoft's co-founder and chairman, and his top lieutenants regarded the company's bitter fight against the federal government and the states suing it mainly as an uncompromising defense of Microsoft's unfettered freedom to add whatever it wants to Windows, the corporate crown jewel. This was fundamentally a tying case," said Richard Schmalensee, the dean of the Sloan School of Management at the Massachusetts Institute of Technology and an economist who testified as an expert witness on Microsoft's behalf in the antitrust trial. Yet if the pendulum has swung in Microsoft's direction under the Bush administration, it is by no means clear how much.