For Immediate Release:
Thursday, April 11, 2002
12 p.m.

Frank Conte
Director, Communications & IS
617-573-8750; 617-573-8050

States’ pursuit of Microsoft anti-trust litigation will cost Massachusetts software consumers and developers $billions over three years, says BHI study

A new study by the Beacon Hill Institute at Suffolk University estimates that a proposed remedy endorsed by Attorney General Thomas Reilly as part of a nine-state antitrust lawsuit against Microsoft would cost Massachusetts consumers and software developers billions of dollars.

By insisting on a remedy calling upon Microsoft to offer a stripped-down version of its Windows operating system, the nine state attorneys general will be forcing software developers in Massachusetts to incur approximately $3 billion dollars in costs over the next three years. As a result, over the same period, Bay State consumers will be forced to pay at least $625 million in higher prices.

The new study, And Then There Were Nine: The States v. Microsoft, details the market consequences of ongoing litigation against the software giant. The study questions the merits of a nine-state anti-trust action against Microsoft, a measure that goes far beyond a settlement entered by the United States Department of Justice (DOJ) and the software company last year.

Under the DOJ settlement original equipment manufacturers (OEMs) can offer consumers the choices of competing “middleware” programs such as instant messengers, audio players and browsers. In addition, Microsoft would continue to sell Windows as a uniform product with an underlying code upon which consumers and developers depend.

The plaintiffs in the nine-state case argue that Microsoft should be forced to remove “middleware” code and offer different flavors of Windows with the hope that a competing operation system will evolve. However, a stripped-down version of Windows would force third-party software developers to write several different versions of their applications – driving up developing, debugging and marketing costs. A portion of these costs will be passed on to software consumers.

“As a public servant, Attorney General Tom Reilly’s first priority should be to advance the interests of the Commonwealth’s citizens,” says David G. Tuerck, Executive Director of the Beacon Hill Institute. “But his pursuit of harsher penalties against Microsoft in the ongoing anti-trust suit he has joined with eight other states is not only counterproductive but harmful to both consumers and the state’s software industry.”

A complete copy of the study can be obtained here.


Format revised on 02-Jul-2003 2:48 PM