Regulating Interoperability: Lessons from AT&T, Microsoft, and Beyond

Abstract

Antitrust law confronted the challenges of regulating interoperability between platforms and applications in both the AT&T and Microsoft cases, but it has yet to mine the series of lessons that can inform how to address this challenge going forward. With the Microsoft consent decree still in place, it may too soon to render a final judgment on the remedy adopted in that case as well as to evaluate more generally whether antitrust law is up to the task of developing the institutional strategies - be it the use of technical committees or reliance on standard setting bodies - for addressing interoperability concerns that are likely to increasingly arise in the information-based economy. Nonetheless, policymakers focused on the interoperability issue need to begin evaluating the possibilities and limits of antitrust law in this context.

This Article argues that the effort to promote interoperability through antitrust oversight must grapple with a twin set of challenges. First, it must appreciate how standard setting bodies operate and how to bolster their effectiveness through appropriate government support and antitrust law oversight. Second, it must evaluate the comparative institutional competence of the available institutions that might play a role in different remedial strategies. If courts and enforcers can exercise increased creativity and develop effective remedial strategies, antitrust law can play an important role in avoiding the type of regulation that has generally governed network industries of critical importance to the economy. To be sure, it may be the case that regulating interoperability requires a regulatory authority to oversee the terms of access (as was the case in AT&T), but there are significant costs associated with moving towards an increased reliance on such authorities. Consequently, it is critically important that antitrust law - along with other institutions, such as standard setting bodies - grapple with the question of how to ensure effective oversight regarding access to a platform in a technologically dynamic environment.

Keywords: antitrust law, microsoft, AT&T, interoperability

JEL Classification: K21, K23