Microsoft’s Mistakes: What Not To Do When The Government Investigates Your Monopoly

As America’s antitrust investigators eye Google, Apple, Facebook, and Amazon for possible government intervention, Bloomberg offers nine “lessons learned” from the way Microsoft handled its own antitrust investigation:

Don’t deny the obvious… In the app-store business, Google and iPhone maker Apple together control more than 95 per cent of all US mobile app spending by consumers, according to Sensor Tower data. It could be more effective for these companies not to start by denying that leadership position — if you have 80% or 90% percent of a market, arguing that you don’t really dominate isn’t the hill you want your legal reasoning to die on…

At the height of Microsoft’s hubris (or carelessness, or both), the company sent Windows chief Jim Allchin to the stand with a doctored video that purported to show how computing performance would be degraded when the browser was removed from Windows on a single PC. It was actually done on several different computers and was an illustration of what might happen rather than a factual test, as the company initially claimed — a fact that came to light only after several days of the government picking through every inconsistency in the video. Microsoft remade the simulation several times in an effort to save the testimony. The company seemed to think it could get away with baldy stating a technological claim and mocking up something that backed it up, perhaps reasoning that no one would know the difference, but it miscalculated badly…

In an interview last year at the Code Conference, Microsoft President and Chief Legal Officer Brad Smith lamented the distraction the case caused, and cited it as a reason the company missed out on the search market — the business that fueled the runaway success of Google, now under the microscope itself. Others have pinned Microsoft’s abysmal performance in mobile computing partially on constraints and distractions from the case…

Consider settling early.

The article also remembers leaks of Bill Gates deposition (“During their playback in court, the judge laughed at several points”) and ultimately concludes that “observers and legal pundits almost uniformly agree the software giant did virtually everything wrong in the course of the investigation.” A federal judge ordered Microsoft be split in two, “a fate Microsoft avoided when an appeals court reversed that part of the ruling and the company eventually settled.”
“That 2002 settlement led to nine years of court supervision of the company’s business practices and required Microsoft to give the top 20 computer makers identical contract terms for licensing Windows, and gave computer makers greater freedom to promote non-Microsoft products like browsers and media-playing software…”

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