Microsoft - Unethical Practices

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1.1Origins of Microsoft2

1.2Historical Background2

2What are the unethical practices by Microsoft?2

2.1Software bundling by Microsoft2

2.2Predatory Practices4

2.3Evangelism Practice5

2.4Unethical Labor practices6




Microsoft is huge in its industry; most people say that it is actually a monopoly. Bill Gate is the chairman of Microsoft with his long time college friend Paul Allen as the companies’ vice president. In the beginning, Bill and Paul started Microsoft Inc. from their dorm room writing computer program code for local companies. A new microcomputer was created in 1975 by MITS computer and Bill and Allen wrote a computer program language for the microcomputer (Altair). Bill and Paul moved to New Mexico to be close to MITS computer and they named their new partnership Microsoft.

In 1980 IBM contracted Microsoft to write the language for its new personal computers. In 1981 the company was incorporated into Microsoft Inc., and ended its first year with 128 employee and 16 million dollars in revenue (Microsoft Company History, 2008).

As at 2010 Microsoft profit was 6.7 billion dollars with 93 thousand employees.

Software bundling by Microsoft

May 1988 the united state department of justice took Microsoft to court over the abuse of its monopoly power on operation systems for personal computers. Microsoft was bundling its flagship Internet explorer software with its Microsoft windows operating system. This gave Microsoft the advantage in browsers because all Microsoft windows user had a copy of Microsoft explorer. The other web browsers (Firefox, Netscape navigator or opera) if free were slow to download or had to be purchased in a store.

Bundling is forced on any Microsoft windows user and Microsoft made sure we did not have a choice in whether or not we want to user Internet explorer. Removing Internet explorer from Microsoft windows is not an easy task and it also causes Microsoft window to malfunction or slowdown dramatically.

Product bundling was not enough for Microsoft to enforce internet explorer on windows users, Microsoft have supposedly altered its application program interface (APIs) to favor internet explorer over any other internet browser.

Microsoft’s argument for bundling its window and its explorer is that it is the result of innovation and competition and augured that it is one product two that were inseparable. They merely improved the product by giving windows user the benefit of explorer for free. If so then why is internet explorer sold separately and not attached to the operating system like in the case of internet explorer for Mac operating system. Bundling the two products together is what really makes the price of windows higher than it should be; there is definitely a development cost so it can’t be free.

This is a classic example of Microsoft “embrace, extend and extinguish” strategy. The strategy's three phases are

“Embrace: Development of software substantially compatible with a competing product, or implementing a public standard. Extend: Addition and promotion of features not supported by the competing product or part of the standard, creating interoperability problems for customers who try to use the 'simple' standard. Extinguish: When extensions become a de facto standard because of their dominant market share, they marginalize competitors that do not or cannot support the new extensions”, (Nyman, 2010).

They infiltrate into your market even if they did not have the product at fist then they start bundling it to users of Microsoft window taking advantage of the market power they have and force other product out completely even though they might have been there first. Internet explorer is not only the product bundled in Microsoft. They also include a number of software and programs like Microsoft...
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