Abstract

http://ssrn.com/abstract=838548
 
 

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U.S. V. Microsoft: Did Consumers Win?


David A. Evans


U.S. Environmental Protection Agency (EPA) - National Center for Environmental Economics

David S. Evans


University of Chicago Law School; University College London; Global Economics Group

Albert L. Nichols


NERA Economic Consulting

Richard Schmalensee


Massachusetts Institute of Technology (MIT) - Sloan School of Management

October 2005

NBER Working Paper No. w11727

Abstract:     
U.S. v. Microsoft and the related state suit filed in 1998 appear finally to have concluded. In a unanimous en banc decision issued in late June 2004, the D.C. Circuit Court of Appeals rejected challenges to the remedies approved by the District Court in November 2002. The wave of follow-on private antitrust suits filed against Microsoft also appears to be subsiding. In this paper we review 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. Thus, for those who believe that the courts were right in finding that some of Microsoft's actions harmed competition, the constraints placed on its behavior and the active, ongoing oversight by the Court and the plaintiffs provide useful protection against a recurrence of such harm. For those who believe that Microsoft should not have been found liable because of insufficient evidence of harm to consumers, the remedies may be unnecessary, but they avoided the serious potential damage to consumer welfare that was likely to accompany the main alternative proposals. The remedies actually imposed appear to have struck a reasonable balance between protecting consumers against the types of actions found illegal and harming consumers by unnecessarily restricting Microsoft's ability to compete.

Number of Pages in PDF File: 60

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Date posted: January 25, 2006  

Suggested Citation

Evans, David A. and Evans, David S. and Nichols, Albert L. and Schmalensee, Richard, U.S. V. Microsoft: Did Consumers Win? (October 2005). NBER Working Paper No. w11727. Available at SSRN: http://ssrn.com/abstract=838548

Contact Information

David A. Evans (Contact Author)
U.S. Environmental Protection Agency (EPA) - National Center for Environmental Economics ( email )
Washington, DC 20460
United States
David S. Evans
University of Chicago Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
University College London ( email )
London WC1E OEG
United Kingdom
Global Economics Group ( email )
1400 S. Dearborn, Suite 400
Chicago, IL 60603
United States
Albert (Nick) L. Nichols
NERA Economic Consulting ( email )
United States
617-621-2614 (Phone)
HOME PAGE: http://WWW.NERA.com
Richard Schmalensee (Contact Author)
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
Room E62-525
Cambridge, MA 02142
United States
617-253-2957 (Phone)
617-258-6617 (Fax)
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Citations:  5
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