(Washington, D.C.) – Thomas A. Schatz, president of Citizens Against Government Waste (CAGW), today praised a new study on the potential economic fallout of the Microsoft antitrust case and exhorted the Supreme Court or the Court of Appeals to be prudential in consideration of the case.

The study, by noted economist Stan Liebowitz of the University of Texas, concluded that breaking up Microsoft – the proposed remedy now before the Supreme Court – would cost the economy between $50 and $125 billion over a three-year period. Worldwide, consumers would be forced to pay an additional $125 to $310 billion in higher computer software prices over the same three-year period, the study said.

“Whether the Supreme Court decides to retain the case or send it to the Court of Appeals, both Courts should take this study into account and consider the economic impact of the decision,” Schatz said.  “With the economy, and in particular the technology sector, under pressure from high oil prices and low euro value, it is vital Professor Liebowitz’s study be considered at every level of this case.” 

“Liebowitz’s study arms consumers, taxpayers, and the courts with a real-world analysis on the impact of the Justice Department’s ill-advised lawsuit,” he said.  “On top of the impact on the economy, DOJ and the state Attorneys General have spent at least $30 million on the case.”

The study, entitled “An Expensive Pig in a Poke: Estimating the Cost of the District Court's Proposed Breakup of Microsoft,” also found that instead of enhancing competition, the breakup would actually reduce competition and cause prices to rise in the server, database, and game console markets; that computer software developers will also face higher costs – perhaps as much as $25 billion for U.S. companies and $55 billion worldwide; and that consumers will be faced with a more complicated and bewildering challenge when choosing, setting-up and using a new PC.

Liebowitz is professor of Economics at the Management School of the University of Texas at Dallas. He is the author of more than 25 academic articles and five books.  The study was commissioned by the Association for Competitive Technology, of which CAGW was a founding member, and is available online at: http://www.actonline.org

CAGW is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.