Is Microsoft a Monopoly?
Microsoft Monopoly Corporation
Samantha F. Grinvalds
DeVry University
The Microsoft Corporation has lead people believe that they were attempting to gain monopoly power in the computer operating systems market. A monopoly market structure consists of having one firm that has control of the resources and market by selling a unique good that has no available substitutes, in which; make it very difficult for others to enter into this market. In America, we enjoy a free market rather than monopolies because monopolies create disadvantages to our society. However, having monopolistic power in a market is not necessarily bad, in some cases, monopolies are tolerated. There is reason to believe that Microsoft was trying to gain monopoly power, this is why they were investigated for anti-competitive activities.
To regulate corporations, the federal and state governments put in place antitrust laws. These laws helped to keep companies from becoming to large to prevent monopolies and these laws encourage competition. Microsoft Corporation was investigated for breaking such laws, trying to monopolize and competed to be dominate the web browser marketplace. As Gilbert stated, “Microsoft engaged in anticompetitive conduct designed to maintain its operating system monopoly to the detriment of consumers” (2001, p. 25). The U.S. department of Justice began the investigation of Microsoft’s predatory practices when a complaint accusing Microsoft using “anticompetitive contracts with personal computer manufacturers to maintain an unlawful monopoly in this market” (Gilbert, 2001, p. 26). This gives us buyers no substitutes for purchasing a personal computer and creates imperfect competition for this industry. This type of competition and rent seeking behavior is crippling to our country by damaging economic growth. Microsoft wanted to “organize themselves in a special interest group in order to improve their ability to affect distributional outcomes. The process
Samantha F. Grinvalds
DeVry University
The Microsoft Corporation has lead people believe that they were attempting to gain monopoly power in the computer operating systems market. A monopoly market structure consists of having one firm that has control of the resources and market by selling a unique good that has no available substitutes, in which; make it very difficult for others to enter into this market. In America, we enjoy a free market rather than monopolies because monopolies create disadvantages to our society. However, having monopolistic power in a market is not necessarily bad, in some cases, monopolies are tolerated. There is reason to believe that Microsoft was trying to gain monopoly power, this is why they were investigated for anti-competitive activities.
To regulate corporations, the federal and state governments put in place antitrust laws. These laws helped to keep companies from becoming to large to prevent monopolies and these laws encourage competition. Microsoft Corporation was investigated for breaking such laws, trying to monopolize and competed to be dominate the web browser marketplace. As Gilbert stated, “Microsoft engaged in anticompetitive conduct designed to maintain its operating system monopoly to the detriment of consumers” (2001, p. 25). The U.S. department of Justice began the investigation of Microsoft’s predatory practices when a complaint accusing Microsoft using “anticompetitive contracts with personal computer manufacturers to maintain an unlawful monopoly in this market” (Gilbert, 2001, p. 26). This gives us buyers no substitutes for purchasing a personal computer and creates imperfect competition for this industry. This type of competition and rent seeking behavior is crippling to our country by damaging economic growth. Microsoft wanted to “organize themselves in a special interest group in order to improve their ability to affect distributional outcomes. The process
References: Gilbert, R.J., Katz, M.L. (2001). An Economist’s Guide to U.S. v. Microsoft. Journal of Economic Perspectives, 15(2), pp. 25-44. Retrieved from EBSCOhost database 08953309. Krueger, A.O. (1974). The Political Economy of the Rent-Seeking Society. The American Economic Review, 64(3), pp. 291-303. McKenzie, R. (2000). Microsoft’s Application Barrier to Entry: The Missing 70,000 Programs. Policy Analysis, 380(1), pp. 1-21. Vaubel, R. (1984). The Government’s Money Monopoly: Externalities or Natural Monopoly? Kyklos, 37(1), pp. 27-32. Retrieved from EBSCOhost database 00235962.