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Abstract:
Among the proposed remedies in the Microsoft case are structural remedies that would create competition in operating systems for personal computers. One criticism that has been raised against such remedies is that they would lead to "fragmentation" of the Windows standard. According to this critique, the remedy would lead to a number of radically different and incompatible operating systems. As a result, these remedies would impose expensive porting costs on applications developers, leading to higher costs and less product variety for consumers. This paper examines the "fragmentation" hypothesis and concludes that fears of fragmentation and high porting costs resulting from Windows competition are unwarranted. The competing operating systems created by an effective structural remedy will start from the same code base and run on the same hardware platform, thereby reducing porting costs. In addition, the operating systems competitors will have the incentive to maintain backward compatibility and compatibility with each other, which will serve to reduce porting costs. Finally, porting costs can be reduced further by cooperation among the operating systems competitors. The cost of porting from one operating system to another will be far smaller than from the Windows operating system running on an Intel microprocessor to a new operating system running on a different microprocessor.


Other papers related to the Microsoft Case:

"Creating Competition in the Market for Operating Systems: A Structural Remedy for Microsoft"
by Thomas M. Lenard.

"A Fool's Paradise: The Windows World After a Forced Breakup of Microsoft"
by Stan J. Liebowitz.

"Breaking Windows: Estimating Some Costs of Breaking up Microsoft Windows"
by Stan J. Liebowitz.

Our database includes more than 20 other papers about the Microsoft case. To find them, please use an "abstract body" search,. and enter "Microsoft" as the search term.

Abstract:
This paper examines a number of issues in the economics and law of leverage and monopolization through the lens of the Microsoft case. The paper explains how Microsoft's practices can be divided into two categories -- exclusivity and incompatibility. This exclusionary conduct has the effect of preserving its operating system monopoly from the threat of competition, a characterization which does not violate the single monopoly profit theory. After carrying out an economic analysis of this exclusionary conduct, the paper then uses a decision theoretic approach to evaluate alternative legal rules for governing such alleged monopolizing conduct.