Report

Comment on the Revised Proposed Final Judgment

Robert E. Litan, Roger G. Noll, and William D. Nordhaus



Introduction

We are filing these comments on the Revised Proposed Final Judgment (RPFJ) and Competitive Impact Statement (CIS) to provide the Justice Department and the court with what we believe is a useful economic analysis to assist the court in fashioning the appropriate remedy in this matter. In brief, we believe that the RPFJ is not in the “public interest,” as that test is applied under the Tunney Act. Accordingly, the RPFJ should either be rejected outright now, or the court should refrain from ruling on the RPFJ until it has completed its further factual inquiry regarding the remedy proposed by the nine states not party to the RPFJ. If, however, the court accepts the RPFJ in the meantime, we strongly urge it to treat the RPFJ as an interim remedy and expressly leave open the possibility of supplementing the RPFJ with the additional remedies discussed in detail in this comment. We also recommend that in conducting its further factual inquiry in the remedy phase of this litigation that the court actively consider a structural remedy that would create some competition in the PC operating system market that, but for Microsoft’s unlawful acts, reasonably could have been expected to have emerged by this time.

Interest of the Commenters

Each of the signatories of this Comment is a professional economist with expertise that is relevant to the matter now before the court, namely the design of an appropriate remedy to address Microsoft’s antitrust violations. We are filing this submission in our own personal capacities and not on behalf of the institutions with which we are currently affiliated or employed (and identified shortly). We are submitting our views to assist the court in deciding whether to accept the RPFJ and ultimately in fashioning an appropriate remedy. None of us has been employed by or retained as consultant on matters before this court for Microsoft, the federal or state governments, or any other interested party in this litigation. Furthermore, none of us is receiving any compensation from anyone for submitting these comments.

Authors