In the Footsteps of Giants (Premium)

Next week, Google will face off against the U.S. Department of Justice (DOJ) in a milestone antitrust trial with strong echoes of the past. The DOJ is involved in an antitrust trial against a technology juggernaut? Now what does that remind us of?

United States v. Microsoft is well known with this audience, of course, but it’s been a while, and some of the details may be lost to the mists of time. I wrote about this antitrust trial in my Programming Windows series, and in the resulting book, Windows Everywhere. But here’s a recap of what went down, with an eye toward comparing that case and Microsoft’s response to what’s happening today with Google.

As Microsoft drove to prominence in the 1990s, it left a mountain of corpses in its wake, companies like Apple, Borland, Lotus, Novell, WordPerfect, and many others that were either destroyed or sidelined by the software giant as consumer and business customers settled on Windows and the related software and services ecosystem provided by its maker.

We’ve all heard the term “two sides to every story,” but in this case, there were often more than two sides. In some cases, Microsoft created (or bought and then enhanced) the better product. In some, the competition made their own mistakes, sabotaging any chance they had to beat Microsoft. In some, Microsoft preempted competing product announcements by announcing that it, too, was working on something similar even when it wasn’t, and would never actually ship such a product. And in many cases, it was a combination of these and other factors.

Regardless of the ethics of its business practices and the relative ineptitude of some of its competition, Microsoft eventually came to dominate the PC industry and thus personal computing. And its rule was absolute: in this crucial new market and a key driver of the economy of the 1990s, Microsoft was in effect bigger---more powerful---than the rest of the industry combined. There was Microsoft, and then there was a shrinking collection of also-rans.

Microsoft’s domination and potential for abuse wasn’t lost on U.S. antitrust regulators. When the U.S. Federal Trade Commission (FTC) heard that Microsoft and IBM had announced plans to split the market for PC-based operating systems between Windows and OS/2 in late 1990, for example, it launched an investigation into what it feared was an anti-competitive dividing of a market. What it found was much worse: Microsoft was using a wide range of anti-competitive business practices to harm competitors of all kinds, including IBM. And so in 1993, it finally voted whether to formally charge the company with sweeping antitrust charges. A vote that failed by a 3-to-2 margin, thanks only to the recusal of one commissioner who claimed an unstated conflict of interest. Microsoft was off the hook.

Until it wasn’t: the FTC handed its mountains of boxes of paperwork evidence over to the U.S. Department of Justice (DOJ), which then forced ...