The Antitrust Case Against Microsoft
The U.S. government charged that Microsoft had violated antitrust law. Microsoft disagreed. Do you agree with the U.S. government, or with Microsoft? In answering this question, you may wish to address two issues. Was Microsoft a monopoly? Did it use its monopoly to compete unfairly against other companies?
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 practices and reputation. An evaluation of the case findings and Microsoft’s defense led me to agree with the Court. The first step in reaching this opinion was to determine if Microsoft is in fact a monopoly.
Monopolization is proven by two elements. One is that the company “possesses monopoly power in a properly-defined market.”1 The other element is that the monopolizing organization “obtained or maintained that power through conduct deemed unlawfully exclusionary.” 2 Based on the fact that Microsoft is part of the computer software industry, there could be arguments that show the company to actually be part of a natural monopoly, due to the premise “that multiple firms providing a good or service is less efficient (more costly to a nation or economy) than would be the case if a single firm provided a good or service.” 3 My belief is that Microsoft actually falls in both categories.
The Court’s Findings of Facts clearly identified several situations in which Microsoft abused its power to fend off potential competitors and maintain its hold of the lion share of the computer software market, which stood at over 90% for the last ten or more years.4 Simply by that calculation alone, this consumer perceives Microsoft to be the
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 practices and reputation. An evaluation of the case findings and Microsoft’s defense led me to agree with the Court. The first step in reaching this opinion was to determine if Microsoft is in fact a monopoly.
Monopolization is proven by two elements. One is that the company “possesses monopoly power in a properly-defined market.”1 The other element is that the monopolizing organization “obtained or maintained that power through conduct deemed unlawfully exclusionary.” 2 Based on the fact that Microsoft is part of the computer software industry, there could be arguments that show the company to actually be part of a natural monopoly, due to the premise “that multiple firms providing a good or service is less efficient (more costly to a nation or economy) than would be the case if a single firm provided a good or service.” 3 My belief is that Microsoft actually falls in both categories.
The Court’s Findings of Facts clearly identified several situations in which Microsoft abused its power to fend off potential competitors and maintain its hold of the lion share of the computer software market, which stood at over 90% for the last ten or more years.4 Simply by that calculation alone, this consumer perceives Microsoft to be the
Bibliography: 1, 2 http://en.wikipedia.org/wiki/Monopolization 3 http://en.wikipedia.org/wiki/Natural_monopoly 4 http://www.usdoj.gov/atr/cases/f3800/msjudgex.htm, III. 34. A. 35. 5 http://www.gargaro.com/test.html 6 Anne Lawrence, James Weber, and James Post: Business and Society, Eleventh Edition (2005), Page 459 7 http://en.wikipedia.org/wiki/United_States_v._Microsoft: Trial 8 http://en.wikipedia.org/wiki/United_States_v._Microsoft: Settlement 9 http://www.stolaf.edu/people/becker/antitrust/statutes/sherman.html 10 http://www.encyclopedia.com/doc/1E1-ClaytonAA.html