A Modern Analytical Framework for Monopolization in Innovative Markets for Products with Network Effects

In the most recent of three landmark antitrust cases against software giant Microsoft, the company argued that courts should apply a different approach to analyzing monopolization charges against new economy industry defendants. The court rejected Microsoft\u27s proposal, and this note explores the merit of some of its foundational principles. The note proposes an analytical framework that employs several mechanisms to address unique features of technology markets, such as the competition for the field and network effects. Under the proposed model, monopolization analysis would condemn those firms which misuse the power to control innovation in the market over time, rather than those which control the price of a particular product in the short term. By applying a more realistic definition of the market in which such firms compete and a sensitivity to the potential value of single providers of technological solutions, the antitrust law can more adequately serve the needs of those industries and the consumers who benefit from such innovative products