Microsoft: Thank Goodness it is a Monopoly Essay

According to the Department of Justice, Microsoft used its resources and technology to drive other companies out of business, thereby eliminating the competition and creating a monopoly. Without competition, Microsoft was able to set prices and consumer conditions in a way that exceedingly benefited the company while ensuring a decreased amount of new competition because of the proprietary software installed in most PCs. (Competitive Processes, Anticompetitive Practices and Consumer Harm in the Software

Microsoft has their dominance of the industry at stake. They could potentially come out on top if left to continue their current tactics. They are masterfully “marketing their products” and it is paying off for them (Love, 1997).

They have expand their business from only on computer software and hardware to online search engine, home gaming devices and smartphone, those business are the popular business in the world, Microsoft is trying to adapt the new market.

United States vs. Microsoft is one the largest, most controversial antitrust lawsuits in American history. Many claim the government is wrongly punishing Microsoft for being innovative and successful, arguing that Windows dominates the market because of the product’s popularity, not because of malpractice by the parent company. Others argue in favor of the government, claiming that Microsoft’s practices conflict with the free market ideal. There are many arguments for both sides of the lawsuit, but what the case really comes down to is this: does the government have the right to interfere in today’s marketplace? Or is Microsoft violating laws that are rightfully imposed by the government?

The war between Microsoft and the Department of Justice actually began with the rollout of Windows 95. In an attempt to gain a greater market share of the Internet browser arena, Microsoft began packaging Internet Explorer as part of their Windows operating system. Microsoft required their original equipment manufacturing (OEM) companies to install Microsoft Internet Explorer and Microsoft Networking software on every personal computer they sold along with icons for each application prominently displayed on the user's desktop.

A recurring point in Gilbert's studies included the notion that people were utterly incapable of making predictions that would lead to their actual optimal happiness. A study showed "that about nine out of ten people expect to feel more regret when they foolishly switch stocks than when they foolishly fail to switch stocks", but the study also showed that those "nine out of ten people are wrong" in assuming that expectation (Gilbert 135). A majority of consumers also made an incorrect assumption, as described by Stiglitz, which resulted in the maintenance and growth of one of the most well known monopolies of the present. The consumers assumed that, due to it's "near-monopoly on PC operating systems," Microsoft was a good and innovative company and is capable in handling computer systems. This was not the case when it came to "alternative technologies" such as the "development of the Internet and the web browser" because their competitor, Netscape, was "building on government-funded research" while Microsoft had no such incentive (Stiglitz 405). Microsoft then decided to launch their Internet Explorer, but by itself Internet Explorer could not compete against Netscape. They knew this, and so "decided to use its monopoly power in PC operating systems to make sure that the playing field was not level." They offered Internet Explorer for

Microsoft has grown into an enormous and powerful corporation by a combination of aggressive business practices and having written operating systems (DOS and Windows) for personal computers. From operating systems it branched out into other software which has, along with the operating system, become something of an industry standard.

America's century-old antitrust law is increasingly irrelevant to our current worldwide information technology market. This law is outdated, in accordance to the modern Microsoft situation, because in the past there wasn't technology as there is now. Recently the government has been accusing Microsoft as being a monopoly. "Techno-Optimists" claim that "efforts by government to promote competition by restraining high-tech firms that acquire market power will only stifle competition." Some analysts disagree. They concede that dynamic technology makes it tough to sustain market power. Still, consumers will want compatible equipment, which will lead them to buy whatever product other consumers are using,

First, Microsoft ‘encouraged’ Compaq, Apple, and other computer manufacturers to promote only Internet Explorer, and to make that the default browser on their PC. This encouragement came in the way of threats to eliminate or delay licensing of operating systems, providing the browser for free to internet access providers, and bundling the software with the operating system under the guise of interactive ease for the consumer. This manipulation led to an increase in the browser’s sales by 45 to 50%, which paralleled the decline Netscape experienced in their market sales in 1998.6

The case against Microsoft was brought buy the U.S. Department of Justice, as well as several state Attorneys General. Microsoft is accused of using and maintaining monopoly power to gain an unfair advantage in the market. The case has been under observation for a long time, but the Justice department is having trouble coming up with substantial evidence against Microsoft. Specifically, the Department must prove:That Microsoft has monopoly power and is using it to gain unfair leverage in the market.And that Microsoft has maintained this monopoly power through "exclusionary" or "predatory" acts(Rule).Some say that Microsoft is only taking advantage of its position in the market and using innovative marketing strategies

Microsoft may feel that there is competitiveness in the relevant market, the facts behind the claims of the rival

had to buy, Microsoft also would sing contracts with the vendors for long periods of time

Microsoft has been fighting competitors in the Operating System fields as well as the Search field for many years. After Apple launched its new Macintosh computer, Microsoft came out with its first production of Windows which had a graphic user interface. Microsoft had 95% of all OS on individual PC’s in the 2000’s where apple only had about 2%-3% (Rivkin 2). A new venture that Microsoft was working toward was application software where the produced Microsoft Word and Excel. At first these two applications where not very popular on PC computers because WordPerfect and Lotus 1-2-3 where the main applications being run. Microsoft’s solution to this competition was

Microsoft (MS) is a multinational computer technology corporation that develops, manufactures, licenses, and supports a wide range of software products for computing devices. In the mid 1990’s, Microsoft held the monopoly in the production of Operating Systems (OS) for personal computers (PC). When their monopoly was threatened by Netscape, MS began bundling the Internet Explorer (IE) web browser with Windows, using cross-promotional deals with internet service providers (ISP), and prevented PC makers from customizing the opening screen showing Microsoft. These actions, which some view as illegal and unethical, dissolved any competition, raised the barriers of entry and inhibited

Looking at the sizable market share Microsoft has come to enjoy over the years, a new competitor would face a number of entry barriers before entering this market. Customers are very loyal to the Microsoft brand and would expect any competitor to offer at the very least the same features that Microsoft already has.