Buzzword of the Week: Baby Bills

I remember when the old AT&T was broken up in the 1980s, so I was familiar with the Baby Bells that came out of that breakup. I was browsing on the Investopedia site recently, and saw the term “Baby Bills,” which at first I thought was a misspelling.

Instead, I found that the term was a hypothetical nickname for the smaller companies that would have been formed if Microsoft had been broken up for violation of antitrust rules in 2000. Baby Bills stood a real chance of having actually been formed since the U.S. government did call for the company’s breakup, but the decision was reversed the following year so Microsoft instead was permitted to keep operating as one company.

The Justice Department settled with Microsoft in 1994 after documents signed by the company force them to agree not to “squelch” competition by creating operating system dominance. In 1997, the Justice Department filed a complaint that Microsoft had violated the decree by demanding that Internet Explorer be bundled with PCs in order to get a Windows 95 license. After years of trials and appeals, they were finally able to come to an agreement in 2001.

photo credit: Money, Money, Money via photopin (license)


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