Microsoft Case Essay Research Paper There has

Microsoft Case Essay, Research Paper

There has been a great deal of focus on anti-trust legislation of late, as it involves most famously, Microsoft. Through the media’s attention to this particular company and the conditions of legislature, we have come to hear a great deal more about anti-trust legislature. The purpose of this paper is to analyze antitrust laws in relation to the well-known Microsoft antitrust case. The thesis of this paper is that Microsoft is a monopoly in the field of PC operating system and has abused its monopoly power.

In order to have a complete comprehension of the case, I think it is helpful to provide some background information about the nature of monopoly, the history of antitrust laws as well as its intent and its role today.

It was during the late 1870’s that the railroad industry was quickly becoming a monopoly. Through this monopoly the railroad industry was gaining a substantial amount of power, revenue, as well as land. “As they began to flex their industrial might, society become aware of the potential problems associated with monopolies. Fearing that their businesses would be affected an organization of farmers known as the Grangers began to push for legislative action” (Millunzi). So what is monopoly. There are two kinds of monopoly. One is natural monopoly, which is subject to regulation by the government. Such monopoly is desirable in our society. Because of extensive economies of scale, it would be inefficient to have several firms in an industry, such as the utility or the telephone industry. The other type is unregulated monopoly. The monopolists have considerable control over product price because they are the only producers in the market. You get their products at their price or you get nothing. Fortunately, The U.S. has laws to protect the consumers. On July 2, 1890 the Congress passed the Sherman Antitrust Act, which states Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony (Jackson), and again in 1914 with the Clayton Act.

The primary purpose of antitrust legislation is to prevent businesses from creating unjust monopolies or competing unfairly in the marketplace. Antitrust law seeks to maximize market efficiency and to protect consumers. It is often assumed that when a company succeeds in achieving a monopoly status, in whatever their industry, society loses out on the benefits that can be gained through competition. Monopolies give the public a single provider instead of a choice; monopolistic corporations are inefficient and stifle innovation; being anti-competitive, they result in higher prices and poorer service to the consumer. “Without opposition a company is able to charge unfair prices for inferior products, at the same time erecting a substantial barrier of entry to potential competitors. (Millunzi).

When we consider Anti-Trust legislation, we are looking at governmental efforts to prevent the forces of corporate wealth and power from assuming despotic control in our society over the lives of the members of society, whether individuals or other corporations. Whatever the stated or implied goals, the real and essential justifications for antitrust laws are to prevent the violation of equal rights to participate in a free market, which are the foundation of both a free society and its free enterprise system, and to insure that corporate power does not gather to itself sufficient control to become a despotic force in its own limited, but segment of this society s economy (Economides). As is generally true with all depots, they will continue expanding their wealth, power, and control until stopped. Regulation of capitalist enterprise, therefore, is absolutely essential in order to maintain a free society.

We have seen monopolies comes and go, such as the phone company AT&T years back, and we are seeing it again with Microsoft.

Microsoft

Twenty years ago, Microsoft was a tiny two-people partnership that wrote interpreter for a now demised language BASIC for an obscure computer company. Today, Microsoft Corporation is the largest software company in the U.S. The name Microsoft is on the tip of almost every computer user s tongue. Their software products cover almost everything that the computer has ever been conceived to perform, from movie making to personal finance, operating system to application development environment. Some of them we may be too familiar with, Microsoft Excel, Microsoft Word, Windows, etc., to name just a few. Obviously, Microsoft has had profound influence in the computer industry and computer users as well. As Microsoft engaged in a series of antitrust case, there are a few questions that need to be answered about Microsoft. Does Microsoft have a monopoly in the PC operating system. If it is a monopoly, has it abused its monopolistic powers. The answer is yes .

The case began in1990 when the Federal Trade Commission (FTC) began an investigation of possible collusion between Microsoft and International Business Machines Corp. By August of 1993, the investigation ended with no lawsuits. They handed the case over to the Department of Justice (DOJ). Investigation by the DOJ revealed that Microsoft monopolized in the field of operati