The Microsoft Anti-Trust Case: Presidential Candidate Recommendations

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

The Justice Department maintains that the most critical concern involved Microsoft’s agreement to license a code to other companies, which allows rival products to communicate with Windows software. As of January 17, 2004, only eleven companies have chosen to license this code, most of which are not much competition for Microsoft. In addition, many companies are accusing Microsoft of demanding unreasonable fees and tedious restrictions for the code license (Krim, 2004).

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?

On July 15, 1994, the United States sued Microsoft for unlawfully maintaining its monopoly in the market for PC operating system software. The lawsuit alleged that Microsoft engaged in anti-competitive marketing practices directed at PC manufacturers that distributed Microsoft operating system software preinstalled on its PCs. Microsoft began to levy fines against original equipment manufacturing (OEM) companies who distributed or promoted operating systems other than Microsoft. On August 21, 1995, Microsoft "consented" to a "Final Judgement" against them.

The Justice Department and the states contend that Microsoft is violating the Sherman Antitrust Act, which was passed by Congress in 1890. The act has two sections. Section I prohibits certain types of agreements that restrict the flow of trade. Section II prohibits the misuse of monopoly power, namely anti-competitive actions that seek to maintain that monopoly power and actions that attempt to use that monopoly power to dominate another market (2).

After a five-year investigation costing millions of dollars, the Antitrust Division found little that could be characterized as anti-competitive. But that did not stop the government. Not only did DOJ file an antitrust suit that caused Microsoft to cancel its planned

Commencing in 1990, Microsoft was investigated and then charged with violation of the Sherman Antitrust Act which governs United States businesses. The company was determined to be a monopoly, and one which used anti-competitive practices to keep its leading edge on the market. As would most any organization on the receiving end of the allegations, Microsoft did not agree with the charges and sought to defend its business

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

Even after the disagreements on anti-trust laws, the Supreme Court has the final say in the decision. A firm will be sued by the government if it has a very high market share and if there is evidence of market dominance (McConnell, Brue, and Flynn). However, even if the government was the case, the problem always is on how to correct the monopoly so it doesn’t continue to be in violation of the anti-trust laws. One particular anti-trust suit that is famous is United States versus Microsoft.

in the most part, states that Microsoft is truly dismantling the competitive market. IBM and Apple created OS/2 and the Mac OS, respectively. Because of this “barrier of entry,” these top companies have not been able to “compete effectively with

Microsoft is a highly diversified company. Its technologically-related products span from software to music players to game consoles to web browsers to search engines to phones. However, its flagship product, the product which has been the primary driver of its profits has been Microsoft Windows, the ubiquitous operating system that runs on virtually every computer in the world. Windows has been deemed so critical that even Microsoft's competitor Apple was effectively forced by market pressures to allow its Macs to run Windows, in an effort to boost sales. "As astounding as Apple's success has been, it hasn't put a dent in the Microsoft Office monopoly. [Current CEO] Ballmer and company still profit on every Macbook running Word, Excel and PowerPoint" (Greg 2012).But while Microsoft continues to make its highly profitable Windows products (despite industry criticism about its user features); it has struggled to diversify in its many critical areas, most notable in its music, phones, and Internet service.

On May 18 1998, Microsoft was sued for illegal competitive practices to protect its monopoly, by the U.S. Department of Justice (DOJ) and the Attorneys General of twenty U.S. states. In addition, the DOJ sued Microsoft in October 1998 for violating a 1994 consent decree by bundling its Internet browser with the Windows software. Judge Jackson found Microsoft's dominance of the personal computer (PC) based operating systems (OS) to be a monopoly, that Microsoft had taken anticompetitive actions. He judged that Microsoft had violated Sections 1 and 2 of the Sherman Antitrust Act and ordered a breakup of Microsoft into two units, one for the OS and the other for non-OS softwares. However, the Court of Appeals announced

Microsoft had entered various new markets in which it has no propriety advantages with it’s new diversification strategy. Microsoft could not conquer all the markets alone as they would have to face new challenges and many industries were against Microsoft getting into their industry as they feared that Microsoft would monopolize the market. Hence, it improved its already existing as well as created new partnerships in the newly targeted industry. Microsoft hence, needed to constantly monitor the dynamic changes in the markets and adjust its strategies to capture opportunities in these markets.

The best position on the Microsoft monopoly problem is one best for the general public, those who are and will be using Intel-PC products. This position is in opposition to Microsoft and to support the State and the public. This will consequently give the public better choice, thereby keeping the price of the product down and benefiting the general public. To understand why this position is the best choice two simple questions must be answered. The first is, is Microsoft a monopoly? And the second is, whether Microsoft is a monopoly or not, does that have a negative effect on the consumer? The answer to the first question is found by examining Microsoft and the second question is found by considering

Microsoft has a long history of engaging in monopolistic behavior, from the initial efforts to protect their operating system business to the forced bundling of key software components including Internet Explorer (Meese, 1999). The goals of this analysis include a critical evaluation of why Microsoft has been investigated for antitrust violations, an assessment of how they are trying to gain monopolistic strength in the computer software industry, in addition to an assessment of the good and bad aspects of monopolies in general.