Settling with Microsoft: A Case Study of Taiwan's Political Economy and Legal Culture

[[abstract]]Antitrust challenges against Microsoft, the world’s largest software company, have raised critical legal, political, and economic issues in many countries. The purpose of antitrust law is to prevent concerted or unilateral anti-competitive behavior from harming the competitive process and thereby consumers. Nevertheless, antitrust law is economy-wide regulation, so its analysis is very fact-intensive and is on a case-by-case basis. One of the key issues in the American government’s longstanding antitrust case, for example, was whether Microsoft took exclusionary actions to maintain its monopoly in PC operating systems and to obtain a monopoly in Web browsers. Although Microsoft’s allegedly anti-competitive activities are almost identical worldwide, their legal outcomes are not. This paper will discuss the implications of the Microsoft case in Taiwan. Taiwan’s Fair Trade Commission (FTC) began an investigation against Microsoft in May 2002 after politicians and consumer organizations questioned the company’s pricing practices. Recognizing the complexity of the case, the FTC approved an administrative settlement agreement proposed by Microsoft on February 27, 2003. After giving an overview of the westernization of Chinese law and its legacy in today’s Taiwan, I will introduce the legislative background of Taiwan’s Fair Trade Act. The law, which includes antitrust provisions, was passed in 1991 and became effective on February 4, 1992. It reflected not only internal demands for promoting free competition and ending heavy-handed economic interventions from the government, but also external pressures, because other industrial countries, especially the U.S., were eager to create a level playing field in Taiwan. I will then review the FTC’s case against Microsoft and examine the settlement in a social, economic, legal, and political context. I will map some of the many influences of the settlement, including Taiwan’s intellectual property policy and consumer interests. These discussions will shed light on the rule of law in Taiwan.[[fileno]]2070402030002[[department]]科技法律研究