Tuesday, February 17, 2015

Beginnings of the "more technological approach"

1998: "To meet Microsoft’s arguments about the integration of the operating system and the browser, Justice Department lawyers needed to understand how software programs were written...They needed to appreciate the technical characteristics of software code and design, something that Microsoft and its software engineers already understood", in  A. Gavil, H. First, The Microsoft Antitrust Cases: Competition Policy for the Twenty-first Century, MIT Press, 2014. A terrific read, see here for a book review - with which I only partially agree, though. Contrary to the reviewer's opinion, I didn't miss the "drama" at all (read the footnotes!). Moreover, there are plenty of references to the economic underpinnings of the Microsoft cases (basically, network economics and the then nascent theory of two-sided markets). However, what I'd have liked to find in the book is also an in-depth discussion of the suitability of the economic theories that played a decisive role in the Microsoft cases for competition policy going forward (legal theories are already depicted by the authors as sufficiently flexible to cope with new challenges). For instance, how solid is the application barrier to entry argument  likely to be in other high-tech markets such as mobile?