DOJ vs IBM

From 1969 to 1982 the DOJ was embroiled in anti-trust case with IBM very similar to the Microsoft case. While no conviction was ever brought against IBM, IBM agreed to a consent decree which many believed represented too much intervention on the part of the government.

    The internal "arms length" relationships that IBM divisions were forced to have made customer delivery and solutions a nightmare. The consent decree meant that products did not work as well together as they should, that products and services were late, and even worse, that support and installation of key new products was made significantly more difficult because IBM could not "bundle" the products and services together.

    What we had then is basically what we are about to have now: a bunch of lawyers deciding how technology and its related services must be packaged and how innovation needs to be structured. This is a bad idea. (PC Week)

Although the case was long winded, it eventually dwindled and lost importance, not because of the strength of the DOJ's case, but rather because of the effects of the free market economy. When the DOJ brought the case, IBM held a monoply of the computer industry, which at that time consisted mainly of mainframes. IBM had aquired this position through good business and quality products. When the market switched to predominantly PCs, IBM was still a competitive player. However, through a series of bad business decisions, IBM lost its monopoly position and is no longer the giant it once was. This example shows that especially in the fast-paced, high tech computer market, economic forces do regulate competition. This example supports Microsoft's claim that although they appear to hold a monopoly in the operating system market, they do still face fierce competition, and their position is more tenuous that it seems.