Apple Inc (AAPL)

[EDWARD STEVENSON]

U.S. vs. Apple: Who would win?
by: Philip Elmer-DeWitt May 3rd, 2010

A report in Monday's New York Post that two government agencies — the Federal Trade Commission and the Department of Justice — are each considering launching an antitrust investigation against Apple (AAPL) puts me in mind of the case the DOJ and 20 states brought against Microsoft (MSFT) nearly a dozen years ago.

To many observers — including the judge who heard the case — U.S. vs. Microsoft seemed open and shut. In Nov. 1999, Judge Thomas Penfield Jackson found that Microsoft's dominance of the PC operating systems market constituted a monopoly and that the company had illegally used that power to try to crush Apple, Java, Netscape, Lotus Notes, Real Networks, Linux, and others. His remedy, offered the next spring, was to break Microsoft into two units, one that made operating systems and another that made applications.

Microsoft immediately appealed, and while it couldn't overturn the findings of fact, it successfully fought the remedy. Based on embargoed interviews Judge Jackson had given the press during the trial, the D.C. Circuit Court of Appeals found he had displayed anti-Microsoft bias and conducted himself unethically. It handed the case to another judge with instructions to craft a more modest remedy.

The case was settled in Nov. 2001. Microsoft remains intact and its software still runs nearly 9 out of 10 of the world's PCs, although to many in the industry, the company doesn't seem to have the kind of swagger it exhibited before and during the trial.

Given that history, what chances does the government have against Apple?


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