Analysis of Microsoft's Monopolistic Behavior

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An Analysis of the Microsoft Monopoly Introduction From the pricing practices for its Microsoft Windows operating system (Werden, 2001) to the forced bundling of Internet Explorer on all Original Equipment Manufacturer (OEM) partners' laptops, PCs and server systems (Meese, 1999) Microsoft is considered to be the most advanced and sophisticated in how to gain advantages from monopolistic behavior. The intent of this analysis is to evaluate why Microsoft was investigated for antitrust behavior, and assess if they are trying to gain monopolistic power in the computer software industry. Also included is an assessment of whether monopolies are always bad or not, including an example of how one attempt by Microsoft to create a monopoly actually lead to rapid innovation in the operating system arena. Analysis of Microsoft's Monopolistic Behavior The most well-known instance of Microsoft's strategies at attempting to create a monopoly center on their strategies to dominate the desktop operating system marketplace with MS-Windows (Werden, 2001). Microsoft devised a series of contractual requirements for their OEM partners, many of which are systems manufacturers (Dell, Gateway, HP, IBM and others), requiring them to pay premiums if any secondary operating systems were loaded onto these systems during production (Werden, 2001). By doing this, Microsoft was creating a barrier to entry to its desktop operating system competitors while also forcing the demand curve of this area

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