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Illustration: Sarah Grillo/Axios

Microsoft's epic battle with the U.S. government from 1997-2002, the last major federal antitrust action in tech, casts a long shadow over today's Department of Justice lawsuit against Google — but the industry landscape today is profoundly different.

The big picture: Microsoft's legal ordeal came at a moment when its old competitors, like Apple, were on the ropes, and new competitors, like Google, were just launching. The antitrust case preoccupied Bill Gates and the rest of Microsoft's leadership for years and arguably gave all those competitors the breathing room to grow toward their current success.

Yes, but: Today, if Google gets similarly distracted, it has many heavyweight competitors — including Apple, Amazon, Facebook and (still!) Microsoft — ready to seize the moment.

Flashback: Beginning in 1997, the government charged Microsoft with using its dominance in the desktop operating system market to corner the web browser market.

  • The government won in court and in 2000 a judge ordered Microsoft split into two companies. However, an appeals court unanimously overturned the order and a new administration agreed to a less punitive settlement.

The Microsoft case, like the Google suit, centered on issues like the definition of a market, the power of defaults (browsers then, search providers now), and questions of "tying" — when companies make deals with third parties that leverage their monopoly power in one realm to pursue market dominance in another.

  • Both cases involve products (browsers and search) that user don't pay for, which makes it harder to prove consumer harm by the usual yardstick of price increases.

Lessons for Google:

1. Federal antitrust cases have a way of growing over time, expanding in scope, adding additional state actions and sometimes even private suits into the mix.

2. Some of Microsoft's troubles resulted from its own combativeness. Gates' defiant testimony before Congress and the company's unwillingness to admit error or find grounds for compromise pushed the case to a more definitive judgment against the company.

  • By contrast, during the same era Intel — another market dominator — found all sorts of ways to settle with regulators when they came after it.


Go deeper:

Go deeper

Jan 28, 2021 - Technology

Big Tech at war over privacy

Illustration: Sarah Grillo/Axios

The world's biggest tech firms are at each other's throats over how to manage data privacy, an issue that will shape the internet economy for years to come.

Why it matters: Absent any U.S. government intervention, tech companies are introducing rules that favor their own ideals and business models, sometimes at their peers' expense.

Dave Lawler, author of World
1 hour ago - World

Americans increasingly see China as an enemy

One in three Americans, and a majority of Republicans, now view China as an enemy of the United States, according to a new survey from Pew Research Center.

By the numbers: Just 9% of Americans consider China a "partner," while 55% see Beijing as a "competitor" and 34% as an "enemy."

Scoop: Leaked HHS docs spotlight Biden's child migrant dilemma

A group of undocumented immigrants walk toward a Customs and Border Patrol station after being apprehended. Photo: Sergio Flores/The Washington Post via Getty Images

Fresh internal documents from the Department of Health and Human Services show how quickly the number of child migrants crossing the border is overwhelming the administration's stretched resources.

Driving the news: In the week ending March 1, the Border Patrol referred to HHS custody an average of 321 children per day, according to documents obtained by Axios. That's up from a weekly average of 203 in late January and early February — and just 47 per day during the first week of January.