June 18, 2022
Internet Explorer is no more.
Especially now, the protracted antitrust battle seems silly at best. Markets are dynamic places that are always (creatively) destroying yesterday’s great ideas.
Microsoft’s 1990’s antitrust battle had centered around Internet Explorer.
Here’s Bill Shughart with a summary:
“One of the key allegations against Microsoft was that it had restrained trade in web-browsing software by bundling Internet Explorer (IE) with its Windows 95 operating software, the first truly successful version of its PC operating system. IE had pride of place on desktop screens, and, horror of horrors, was included in Windows software at no extra charge. Microsoft’s business practices especially aggrieved James Barksdale, Netscape Corp.’s CEO, whose Navigator was at the time IE’s chief web-browsing rival. Barksdale was in fact a key player in convincing the Justice Department to sue Microsoft after the Federal Trade Commission twice failed to issue a complaint against Bill Gates and company.”
He concludes:
“That is how competitive markets operate even in so-called network industries, where today’s dominant company cannot expect to hold onto its position forever. Success invites Schumpeterian creative destruction. Marketplaces do not stand still and no one, including “expert” antitrust law enforcers, possibly can foresee the directions in which they will evolve.”
And here’s an old classic from Dominick Armentano in the New York Times:
“Microsoft is again under antitrust investigation by the Justice Department. The complaint this time is that the company may have offered discounts for its Windows 95 operating system to personal-computer makers that promised to give its Internet Explorer software prominence over similar products from its competitors.
Browser makers like Netscape Communications have howled that this would be unfair competition, and the Government has responded with an official inquiry.
Companies with monopoly power offer less favorable terms to customers. They raise prices, reduce output and delay technological developments. The only economically coherent mission of antitrust law is to thwart such behavior.
Yet, Microsoft is clearly aiming to expand its relatively small market share in Web browsers by lowering prices and sweetening overall terms to potential customers. This is explicitly competitive behavior. It is understandable that Microsoft's rivals would resent such an aggressive strategy. But aggressive marketing shouldn't be equated with an antitrust violation.”
For years, I’ve used Internet Explorer as a whipping boy in Econ 101. The students appreciate it because they immediately see the absurdity of an antitrust case based on the advantage a firm is receiving from Internet Explorer. But in a few semesters, I’ll likely have to explain what this dinosaur product was. Something I already have to do with CD’s (not commercial deposits…) and MySpace.
A small price to pay for teaching—and living—in a commercial, dynamic society.