Class: Business and Society
Course time: Online
Professor: Dr. Chemene Crawford
Date due: 06/03/2006
The Anti-Trust Case against Microsoft
Microsoft was founded in 1975 by founder Bill Gates, a former Harvard drop out (Lawrence, 455). The business grew and controlled 90% of the market for operating systems, with revenues of over nineteen billion dollars per year (Lawrence, 455). In the nineteen nineties, the Internet generation was starting to explode and Microsoft new that it would be a profitable market. This led to their approach to develop a new product to handle this revolution. Their solution was Internet Explorer, which was created in 1995 to allow its users to access the World Wide Web with a graphical user interface. There only real competition was Netscape Navigator which controlled 87% of the web browser market in 1996 (Lawrence, 456). Microsoft tried to divide the market with Netscape and came up short, so they decided to crush the competition by utilizing their successful operating system as a bargaining chip with manufactures and software developers (Lawrence, 457). This led to an increase in market value of up to 50% with Netscape taking the brunt of it with an equal value decrease (Lawrence, 457). Microsoft new marketing strategy led them to violate the United States Anti-trust laws, in which they were brought to court by the United States Justice Department in 1998. The Justice department stated that Microsoft violated anti-trust laws by requiring computer makers to install Internet Explorer on computers as a condition of licensing (Wikipedia). Microsoft did not think they were in violation of any law, especially the anti-trust law and stated that the Internet Explorer was an added feature of Microsoft Windows (Wikipedia). They also came up with the following defense statements to defend their case: - “Their actions did not harm consumers, a key test in antitrust laws and felt that...