Interoperability and Foreclosure in the European Microsoft Case
36 Pages Posted: 18 Sep 2007
Date Written: August 2007
Abstract
In this paper we discuss some of the most important economic issues raised in European Commission vs. Microsoft (2004) concerning the market for work group servers. In our view, the most important economic issues relate to (a) foreclosure incentives and (b) innovation effects of the proposed remedy. We discuss the economic basis for the Commission's claims that Microsoft had incentives to exclude rivals in the work group server market through degrading the interoperability of their server operating systems with Windows. We also examine the impact of compulsory disclosure of information on interoperability and argue that the effects on innovation are not unambiguously negative as Microsoft claim. We conclude with some general implications of the case for anti-trust enforcement in high innovation sectors.
Keywords: Foreclosure, Interoperability, abuse of dominant position, innovation, European Commission
JEL Classification: O3, L1, L4, L12, L41, L86
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Strategic Use of Tying to Preserve and Create Market Power in Evolving Industries
By Dennis W. Carlton and Michael Waldman
-
Innovation, Rent Extraction, and Integration in Systems Markets
By Joseph Farrell and Michael L. Katz
-
Bundling and Competition on the Internet
By Yannis Bakos and Erik Brynjolfsson
-
Vertical Foreclosure with the Choice of Input Specifications
By Jay Pil Choi and Sang-seung Yi
-
Two-Sided Network Effects: A Theory of Information Product Design
-
Tying and Innovation: A Dynamic Analysis of Tying Arrangements
By Jay Pil Choi
-
An Economist's Guide to U.S. V Microsoft
By Richard Gilbert and Michael L. Katz