Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Tuesday, April 13, 2021

Forced Choice vs. Inertia? An Exploratory Analysis of Choice Screens Applied in the European Microsoft Antitrust Case

Forced Choice vs. Inertia? An Exploratory Analysis of Choice Screens Applied in the European Microsoft Antitrust Case

Omar Vásquez Duque

Stanford University, School of Law, Students; Stanford University, Department of Economics, Students

Abstract

In March 2010 Microsoft started displaying a choice screen including the 12 most widely-used web browsers that run on Windows. The screen was presented only to Windows users whose default web browser was Internet Explorer (IE). This remedy was imposed after an antitrust investigation, in which the European competition authorities accused Microsoft of extending its monopoly from the operative system market to the web browsers market by including IE as Windows’ default application. The choice screen affected the European Economic Area, Croatia, and Switzerland.

After March 2010, when the choice screen started operating, IE’s market share did go down. It is easy to attribute IE’s decay in Europe to the choice screen. Yet, considering publicly available data from StatCounter, a common trend among developed countries is quite noticeable. IE’s market share was going down before the choice screen was put in place in Europe. In fact, IE’s decay, which continues in the following years, is also evident in the U.S., Australia, Canada, among many other countries where choice-screens were not implemented. A differences-in-differences analysis shows that when considering these other jurisdictions as a control group to assess the effect of the choice screen on IE’s market share decay, the impact of the intervention is negligible. When the U.S. serves as the control group, the choice-screen leads to a decrease in IE’s market share between 1.1% and 2.2%, depending on the time-frame considered for the pre-post assessment, and only the difference of 2.2% with a 6-month time-frame is statistically significant. However, when considering the average of the U.S., Canada, and Australia as the control group, the impact of the choice screen is between 0.3% and 1.2% and not statistically significant.

This preliminary finding invites us to critically assess how sticky default applications can be. Consumers have become more sophisticated 25 years after the first U.S. Microsoft case. Thus the theory of harm and the remedies that are thought to address consumers’ inertia should be re-examined, especially what types of consumers may stick to the default applications; whether the choice-screen design has been ineffective; as well as the reach of choice screens.

https://lawprofessors.typepad.com/antitrustprof_blog/2021/04/forced-choice-vs-inertia-an-exploratory-analysis-of-choice-screens-applied-in-the-european-microsoft.html

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