Embrace, extend and extinguish is a phrase used to describe Microsoft Corporation's behavior toward Internet and other standards. It is a system based on the network effect. The strategy works like this:
- Embrace: Microsoft publicly announces that they are going to support a standard. They assign employees to work with the standards bodies, such as the W3C and the IETF.
- Extend: They do support the standard, at least partially, but start adding Microsoft-only extensions of the standard to their products. They argue that they are trying only to add value for their customers, who want them to provide these features.
- Extinguish: Through various means, such as driving use of their extended standard through their server products and developer tools, they increase use of the proprietary extensions to the point that competitors who do not follow the Microsoft version of the standard cannot compete. Unfortunately, the Microsoft version uses proprietary technologies such as ActiveX that places competitors at a distinct disadvantage. The Microsoft standard then becomes the only standard that matters in practical terms, because it allows the company to control the industry by controlling the standard.
The "embrace, extend and extinguish" technique was not a part of the Microsoft antitrust case, possibly because understanding it requires a technical sophistication uncommon in the legal field. Antitrust law traditionally revolves around business practices, not software design.
In the first edition of The Road Ahead by Bill Gates, he explains in detail his plans to use the network effect to Microsoft's advantage. The book was first published before the company became involved in antitrust proceedings.