| Summary: | <p>The Microsoft case (U.S. vs Microsoft, 1998) is paradigmatic of some of the most important features of an antitrust case, like the definition of relevant markets, the possession of market power and of its abuse. In the software in-dustry companies compete over the standard of interconnection, which can be provided at various levels in the production chain, and the competitive environment cannot therefore be restricted to the typical relevant antitrust market. Not only on account of the problems in defining the antitrust mar-ket in a sensible way but also for other crucial reasons we encountered some difficulty in determining Microsoft's market power with the traditional methods. Hence a new definition of market power has been produced. Within this new framework we have been able to give a precise content to the statement that Microsoft has a market power, which is the pivotal point of the case. We have also shown that changes in the market structure, like the acquisition of Netscape by America on Line, could have substantially lessened this market power to the point where antitrust action is no longer desirable.</p><p> </p><p><strong>JEL Codes:</strong> L400, L860</p><p> </p>
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