computerindustry1

“Rapid technological change leads to markets in which
firms compete through innovation for temporary market
dominance, from which they may be displaced by the
next wave of product advancements.”

United States v. Microsoft Corporation, 2001

Overview

No industry has seen as much growth and dramatic change in the post-war era as the computer industry. Thousands of upstart hardware and software firms developed new products, challenging each other as well as the long-established firms for consumers’ loyalty. As a result, it has been argued that the pace of technological change would make antitrust concerns irrelevant in the computer industry.

With the exception of the government’s 1969 monopolization case against IBM, the computer industry was largely free of antitrust scrutiny and private litigation for its first four decades, until the late 1980s. As a decade of Microsoft litigation has shown, the agencies left no doubt about their concerns regarding the possibility that firms might abuse or enhance market power. More recently, they have also expanded their focus to include the strategic use and abuse of intellectual property, including the capture or abuse of industry standards setting processes. Needless to say, the number of private actions by various parties has increased, as well.

Experience

Economists at EI have substantial expertise in every aspect of the computer industry. EI economists have conducted economic analyses of computer industries in conjunction with mergers, joint ventures, and monopolization litigation. For example, EI economists conducted analyses relating to the formation of the Open Software Foundation, a broad-based industry joint venture that developed an alternative to the Unix operating system; Hewlett-Packard’s acquisition of Apollo Computer; EDS’s case against Computer Associates; NCR’s defense against takeover by AT&T; and Elite’s attempted acquisition of CMS (time and billing software). Specific EI expertise includes products such as:

arrowsub   Microprocessors
arrowsub   Technical work stations
arrowsub   Operating systems
arrowsub   Graphical user interfaces
arrowsub   Mainframe systems software
arrowsub   Relational databases
arrowsub   PC utility software
arrowsub   Semiconductors
arrowsub   Semiconductor equipment
arrowsub   Semiconductor simulation software
arrowsub   Tax preparation software
arrowsub   Storage devices
arrowsub   Computer languages
arrowsub   Terminals
arrowsub   Keyboards

If you are interested in learning more about the computer sector consulting services offered by Economists Incorporated, please contact a member of our management team: David Argue, Jonathan Walker, Matthew Wright.