Microsoft Antitrust Case
Did Microsoft violated the Antitrust Law?
Microsoft Antitrust Case
Microsoft was formed in 1975 by a university drop out in his junior year called Bill Gates. Bill Gates has been successful to achieve the company’s vision, “we want PC on every desk in every home and office”. Microsoft which is a massive company today was only a small company in 1983. It headquarters contained only a small building next to the Burgermaster in Bellevue and another in Seattle suburb. Microsoft was mainly recognized as the producer of BASIC programs for many systems, and of MS-DOS, an operating system which it sold to IBM. Many different companies were working on MS- Dos that time but the main problem was that the computers were incompatible with each other. To solve this issue Microsoft was spending heavily on windows called “interface manager”. The success of entire company was depending on the success of this project. The invention of windows made computers possible to be compatible with each other and the invention opened the doors for Microsoft. It introduced “integrated software” and a number of new “integrated operating environments”, which include windows.
Where Microsoft has been successful in invention of windows, it was also claimed to get involve in anticompetitive practices that is the violation of Antitrust Law. It is claimed that Microsoft made it’s windows incompatible with Netscape Navigator. Microsoft was very worried about the popularity of Netscape navigator and to overcome with this situation Microsoft made an updated version of its windows with installed Internet Explorer, which was impossible to uninstall.
U.S. Antitrust law was originated in the late 19th century to combat the fear aroused in the public by the uncontrolled growth of big business. The objectives of Antitrust Law are: • Protection and preservation of competition
• To protect the consumer’s welfare by prohibiting deceptive and unfair business practises • To protect small, independent business firms from the economic pressure exerted by big business competition
Microsoft has been accused of being involved in anti competitive practices to remain the leader in computer industry. It has been mainly accused of three anticompetitive actions:
▪ Microsoft had attempted to divide the market with Netscape. This effort was unsuccessful. ▪ Microsoft had used its operating system monopoly to compel its partners to promote Internet Explorer, to restrict their ability to promote Navigator, and had taken other measures to increase use of IE at Navigator’s expense. ▪ Microsoft had integrated Internet Explorer into Windows, made it difficult to uninstall, and made using windows with Navigator inherently unstable.
In addition, Microsoft is also said to enjoy monopoly power in computer industry. Microsoft was the main supplier of operating system for at least 95% of all Intel-compatible PCs worldwide and it was dominant in the industry. Microsoft is accused of charging any price for windows due to its monopoly power. Microsoft is accused to pay a $613 million fine due to its anticompetitive practices & monopoly power it enjoyed and it was told to establish boundaries to its systems to permit competitors to interoperate. Microsoft was also told to provide the source codes of its software in documentation; However Microsoft hasn't fulfilled the European Commission’s demand that the company let competitors to interoperate with its server protocols. Microsoft argues it has satisfied the EC's demands for offering up documentation for the company's protocols - such as those for file sharing, print and authentication - pointing out that it delivered abundant documentation and created a program through which rivals could view Windows source code, which the company billed as the "ultimate documentation." But EC is not satisfied with the Microsoft’s action, it claims that...
Please join StudyMode to read the full document