In 1969, the U.S. Department of Justice (DOJ) sued International Business Machines (IBM) for abusing its monopoly power in the computer industry. The charges would echo in future cases against Microsoft, which we will discuss here, and in more recent years against Amazon, Apple, Facebook, and Google. IBM, the DOJ said, illegally bundled software and hardware and used false product announcements---now called vaporware---to harm competitors. And as would be the case in subsequent tech industry antitrust cases, the IBM investigation was instigated by complaints made by a competitor, in this case Control Data Corporation (CDC).
IBM’s case is most well-known for its length: It didn’t end until 1982, when the then-new head of the DOJ’s antitrust division finally declared the case “without merit.” But in yet another parallel to future tech antitrust cases, IBM’s experiences deeply impacted the firm internally. It had already long ago unbundled its software from its hardware, and it competed much more cautiously than it did in the past. Indeed, the circumstances that led to IBM linking up with Microsoft to create a Disk Operating System for the first IBM PC were in a part a result of the behavioral changes that IBM had voluntarily enacted while its antitrust case was active.