Reflecting on Two Decades Since the Microsoft Decision: Lessons and Insights

On March 22, 2024, the SDA Bocconi School of Management hosted the inaugural European conference organized by Competition Policy International (CPI), titled “Dynamic Competition in Dynamic Markets: Charting the Path Forward?” Among the discussions held was a fireside chat on “Reflecting on Two Decades Since the Microsoft Decision: Lessons and Insights.”

The panel, moderated by Carmelo Cennamo, Affiliate Professor of Digital Transformation at SDA Bocconi School of Management, brought together esteemed speakers including Mario Monti, Former Italian Prime Minister and European Commissioner; Olivier Guersent, Director-General at DG COMP; and Frédéric Jenny, Chairman of the OECD Competition Committee.

Cennamo initiated the conversation by delving into the motivations behind the Microsoft decision two decades ago and its lasting impact on competition policy. Mario Monti, one of the key actors involved in the decision, provided insights into the complexities surrounding the case, highlighting the leveraging of market power into neighboring markets by Microsoft.

I perceive a significant risk that, in our legitimate pursuit of enhancing competitiveness within the European economy, we may inadvertently undermine one of its fundamental pillars: the European Single Market.”

Monti reminisced about the intense lobbying activities in Washington during that period and underscored the significance of the case amid geopolitical changes, notably the enlargement of the European Union in May 2004.

Following Monti’s remarks, Olivier Guersent reflected on the evolving landscape of competition enforcement since the Microsoft case. He emphasized the adaptability of antitrust rules to the digital sector and cited subsequent cases, such as those involving Google, as evidence of continued antitrust scrutiny in the digital realm.Guersent also discussed the European Commission’s efforts to address market dominance through initiatives like the Digital Markets Act (DMA), aimed at curbing anticompetitive behavior by major tech companies.

Digital signals have distinct features that must be taken into account, but the Microsoft case was the first to show that it is perfectly possible to apply antitrust rules to the digital sector.”

Frédéric Jenny added a nuanced perspective, questioning the assumptions underlying competition policy, particularly regarding consumer choice and innovation. He challenged the notion that increased consumer choice always leads to enhanced competition, citing examples where consumer inertia may result from strategic barriers rather than lack of options.Jenny’s insights prompted a deeper exploration of the relationship between competition and innovation in digital markets, raising questions about the effectiveness of regulatory interventions in fostering competition.

Digital signals have distinct features that must be taken into account, but the Microsoft case was the first one to demonstrated that it is perfectly possible to apply antitrust rules to the digital sector.”

In his closing remarks, Cennamo acknowledged the complexities surrounding competition policy in the digital age and the ongoing efforts to strike a balance between promoting innovation and preventing anticompetitive behavior.

The panel concluded with a consensus on the need for continuous adaptation of competition policy to address the unique challenges posed by dynamic markets, emphasizing the importance of fostering competition while safeguarding consumer welfare and innovation.