Chariz

With the US v Apple antitrust lawsuit news (and it’s about time), I figured looking back to the last landmark antitrust case, US v Microsoft, would be useful to understand what might happen in the future.

The problem:

Microsoft owns Windows, and Windows is the only reasonable operating system any OEM (partners like HP, Dell, etc) can ship on a consumer PC. In other words, it’s a monopoly.

Microsoft also owns Internet Explorer, and they saw the coming of the internet as a huge threat to Windows, unless they acted to keep control. They missed the deadline to release IE for Windows 95, so they bundled it for free with everything they could, including Office and Microsoft Plus! (often came bundled with home PCs). Worth noting Netscape was a paid product until this point.

Windows 95 was revised twice with more extensive IE integration, the final 95 “C” and its bundled IE 4 changing it from a standalone program to a deeply-integrated core feature. It changed how Explorer windows worked entirely - they were now literally IE windows. It changed the desktop so you could add webpages to it (Active Desktop). One of those, enabled by default, was the Channels Bar, which linked to news orgs that paid to be listed.

It also added hundreds of new APIs, not all of which had anything to do with IE. Now Microsoft was strongarming developers into distributing IE 4 for them, requiring their customers to have it installed for their app to work. On top of that, Microsoft’s OEM program changed its rules such that only the latest revision of Windows 95 could be preinstalled, the latest IE must also be preinstalled, and direct competitors to Microsoft flagship products (Netscape, WordPerfect, Lotus, etc) are not allowed. They also told OEMs to stop bundling their own simplified replacements of the Windows 95 desktop, and instead created Microsoft Bob, and we know how well that one went.

At least with Windows 95, you had the option to use the retail “A” release and avoid IE. With Windows 98, IE 4 was preinstalled with all features enabled. Microsoft toned it down a notch with IE 5 in Windows 98 Second Edition, but the damage was already done.

Does this sound familiar at all?

Apple checks a lot of boxes similar to Microsoft here. You can see how a compelling case could be made that Apple doesn’t allow competitors to key features such as Safari and the App Store on iOS, doesn’t allow developers to use a payment service other than Apple’s own, doesn’t want developers to raise prices by 30% or disclose to users that 30% goes to Apple, restricts access to certain features only to developers that are favorable to them, and are known to retaliate against those they don’t like (see Spotify). It’s harder to argue because there’s millions of developers and customers being directly individually affected, rather than only a few dozen OEM partners, but it could be done. In other words, Apple restricts the user, because there is no middleman (the OEM) to apply restrictive contract terms to.

The outcome:

So what happened with Microsoft, and what could possibly happen with Apple? After being found guilty of monopolisation and illegal tying/exclusivity tactics, some of the usual legal back and forth of appealing and whatever, the DOJ and Microsoft agreed to settle, with the terms being:

1. Microsoft must allow OEMs to preinstall any software they want.

2. Microsoft can build “middleware” features into Windows, but OEMs must be able to uninstall them in favor of competitors’ offerings.

3. Microsoft must publicly release documentation for certain private Windows APIs introduced by IE.

4. Microsoft must not retaliate against OEMs that do things they don’t like (when it’s fully within their contract rights).

5. Microsoft was banned from making exclusivity deals with OEMs and developers.

6. Microsoft’s actions would be overseen by a committee for 10 years.

I sure hope to see an outcome like this for Apple. It’s time to see them change, and their recent actions have only reinforced that they can only be made to change by force of the law, and constant oversight to keep them in line.