Key Precedents in the Antitrust Trial

 
 
By eweek  |  Posted 2001-07-02 Email Print this article Print
 
 
 
 
 
 
 

Courts break company into dozens of pieces after trial that shows a wide variety of illegal practices.

1911 — United States v. Standard Oil Co.

Courts break company into dozens of pieces after trial that shows a wide variety of illegal practices. Supreme Court rules company violated antitrust statutes by doing things that could not have made any economic sense other than the destruction of its rivals. Government attorneys said Microsoft engaged in a wide variety of practices that fit that description.

1920 — United States v. United States Steel Corp.

Company is allowed to remain whole, despite 90 percent market share and harsh treatment of competitors. Company crushes domestic competition, remains dominant through World War II, then falls on hard times in late 60s. U.S. loses No. 1 global position to foreign competitors that invest more in new technologies than the American company. Anti-Microsoft forces use failed case as example of what happens to domestic industry when monopolists go unchecked.

1951 — Lorain Journal Co. v. United States

Supreme Court rules local newspaper monopoly may not refuse to deal with companies that advertise on radio. Court finds such restrictions are an "attempt to monopolize." Government today argues that Microsofts insistence that its business partners not deal with rivals is precisely the same kind of behavior. Microsoft cites same case, saying it has no such monopoly, and so cannot be held liable.

1979 — Berkey Photo Inc. v. Eastman Kodak Co.

U.S. Court of Appeals of the Second Circuit rules photo film producer and finisher Kodak may introduce new film cartridges without giving competitors advance knowledge of how to develop them. Limits knowledge dominant firms must share with competition. Later used by Microsoft attorneys to justify companys practice of withholding technical information from competitors that do not cooperate. The case, among the most cited in monopolization law, poses a paradoxical question: How much help must a monopolist give to its competitors?

1982 — United States v. AT&T

Phone monopoly agrees to be broken up, spinning off local phone service into seven "Baby Bells." Companys phone services remain long-distance only until Telecom Act of 1996. Case serves as example of how divestiture can be used to limit monopoly power. But AT&T also serves as a cautionary tale: From 1982 to 1996, Judge Harold Greene ruled as virtual dictator over the Bells. Opponents of a Microsoft breakup warn similar oversight would destroy the companys operations.

1985 — Aspen Skiing Co. v. Aspen Highlands Skiing Corp.

Supreme Court rules that ski resort operator may not back out of joint agreement to market lift tickets with competitor if its only reason for doing so is to harm the competition. Government lawyers say the case shows how Aspen Skiing Co. "redefined" its product simply to kill off its rival. Microsoft, they say, did the same thing in declaring its Internet Explorer part of the operating system.

 
 
 
 
 
 
 
 
 
 
 

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