Case of United States Versus Microsoft United States versus Microsoft Corporation case was a set of combined civil engagements filed against Microsoft relating to the Sherman Antitrust Act by the Department of Justice. In the case, the Department of Justice purported that Microsoft abused monopoly supremacy on PCs in its control of OS sales and web browser software sales (Lohr& Brinkley, 2001). The conflict evolved around the integration of the internet explorer browser software in Microsoft’s Windows OS; a move that was argued to restrict web browser competitors like Opera and Netscape from accessing the browser market. Microsoft argued that it did not have a case to answer and stated the misfortune was the result of the fierce competition and innovation strategies in its industry (Glader, 2006). The following paper aims at analyzing the merits generated from the final settlement of the case and outlines the parties that benefited and those whose interests were harmed. The United States v Microsoft Corporation tentative settlement generated widespread controversy. Numerous critics, mainly Microsoft’s rivals and competitors in the technology sector, have claimed that the planned consensus does not go far enough in punishing Microsoft for the apparent offenses they committed. Analyzing the case as an economist, however, points me to a rather different assumption that the settlement is desirable to the substitute of further litigation. The planned settlement is a concession reflecting the reality that ending the hearing would expose Microsoft to an undefined result and would put the government case at risk. The government dropped numerous basics of the conduct remedies that they had accomplished in the original hearing and the ... ... middle of paper ... ...ides PC manufactures that right, which is not limited to Internet Explorer but also serves other numerous software developers falling under the settlement’s description of middleware. Works Cited Cseres, K. (2005). Competition law and consumer protection. London, UK: Kluwer Law International. Evans, D. S. (2002). Microsoft, antitrust and the new economy: selected essays. New York, NY: Springer. Glader, M. (2006). Innovation markets and competition analysis: EU competition law and US antitrust law. Camberley, UK: Edward Elgar Publishing. Lohr, S. & Brinkley, J. (2001). U.S. v. Microsoft. New York, NY: McGraw-Hill. Perritt, H. (2001). Law and the information superhighway. New York, NY: Aspen Publishers Online. Rubini, L. (2010). Microsoft on Trial: Legal and Economic Analysis of a Transatlantic Antitrust Case. Camberley, UK: Edward Elgar Publishing.
Back in John D. Rockefeller’s day the business moves he established that created a monopoly were highly intelligent and immoral. He was the first person to build a monopoly setting guidelines for future business leaders. Nonetheless, Microsoft ignored the regulations established under The Sherman Antitrust Act, in 1890 and committed a monopoly but finally settled to make it easier for competitors. Monopolies have been happening since the 19th century to the 21st, but remained unfair form hundreds of
The facts of the case according to Judge Jackson show that Microsoft was violating the Sherman Antitrust Act. They were in the process of doing so by allegedly maintaining a monopoly power by anticompetitive means as well as attempting to monopolize the Web browser market. Microsoft was also accused of forcefully attaching its Internet Explorer Web browser to its windows operating system. They were also accused of making marketing arrangements with other companies, such as Apple, which were constituted unlawful exclusive dealings. These action by Microsoft were in violation of both section 1 and 2 of the Sherman Antitrust Act.
In an attempt to decrease competition in the computer technology industry, Microsoft had violated the Sherman Antitrust. In the 1998 case of U.S. vs. Microsoft, the Microsoft company was charged for anticompetitive and monopolistic practices that violated antitrust laws. The plaintiff had claimed that Microsoft had engaged “in a series of exclusionary, anticompetitive, and predatory acts to maintain its monopoly power” (Excerpts) which went against Section 2 of the antitrust law. Microsoft had also allegedly violated Section 1 by “tying its browser to its operating system and entering into exclusive dealing arrangements” which was ruled as a “combination… in restraint of trade or commerce” (Excerpts). The Court ruled against Microsoft, exemplifying the ability of the Sherman Antitrust to curb unethical and illegal monopolistic operations even in modern
Stucke, Maurice E. "Journal of Antitrust Enforcement." Is Competition Always Good? N.p., 4 Feb. 2013. Web. 14 Jan. 2014.
Perhaps the best solution to Microsoft’s authority would include structural remedies, such as the divestiture remedy, which may be less subject to gaming, but pose the risk of substantial costs. However, other sources suggest that the most effective remedy may be that the government’s victory eases the way for plaintiffs in private antitrust suits to collect monetary damages, which could be sufficient to deter future anticompetitive conduct (Journal of Economic Perspectives). Whatever the approach to resolving this issue may be, it is certain that the Microsoft monopoly can no longer enjoy its precedent benefits. Nonetheless, there remains a grand possibility that Microsoft will be able to maintain its power to at least some extent, due to the fact that their products are needed, and their competition remains inadequate.
"Microsoft Corporation, is a multinational computer technology corporation with global annual revenue of US$44.28 billion and 71,553 employees in 102 countries as of July 2006. It develops, manufactures, licenses, and supports a wide range of software products for computing devices. Headquartered in Redmond, Washington, USA, its best selling products are the Microsoft Windows operating system and the Microsoft Office suite of productivity software, each of which has achieved near-ubiquity in the desktop computer market. Microsoft possesses footholds in other markets, with assets such as the MSNBC cable television network, the MSN Internet portal, and the Microsoft Encarta multimedia encyclopedia. The company also markets both computer hardware products such as the Microsoft mouse as well as home entertainment products such as the Xbox, Xbox 360 and MSN TV" ("Microsoft").
In 1994 the Department of Justice (DOJ) filed a complaint against Microsoft saying that Microsoft had an exclusive contract with original equipment manufacturers (OEMs) which is anticompetitive and allows Microsoft to maintain their monopoly for PC operating systems. A settlement was made which disallowed Microsoft from making integrated products and restricted their licensing activities by not tying software products together. In 1997 the DOJ returned to court saying Microsoft has violated the consent decree as Microsoft to keep up with the new competition has tied Internet Explorer with their OS. This violates the decree. The DOJ was successful in the District Court. It was then brought to the Court of Appeals. The case consisted of the Department of Justice, Attorney Generals from 20 states and the District of Columbia where they sued Microsoft for monopolising the market for operating systems, having anti-competitive contracts with OEMs, attempting to monopolise the market for internet browsers and for integrating their web browser with their operating system. Microsoft was found liable...
In 1994, Marc Anderseen invented a new way to search and retrieve information from the Internet: the Netscape Navigator. Netscape’s rising sales and the phenomenal growth of the Internet make its shares go through the roof and even before the Company had any profit; it was valued at $2.7 billion. However, the scenario didn’t go that well for so long and a very powerful and ambitious man came into the picture. Bill Gates put 2,000 of his best programmers to create a browser of his own: The Explorer. The battle of the browsers officially started; Microsoft’s share of the browser market increased from 2.9 percent at the end of 1995 to more than 40 percent by the end of 1997, while Netscape’s market share fell to 54 percent.
Microsoft, currently one of the world’s biggest and most influential software companies, was found in 1975 by William Gates and Paul Allen.[1] It quickly positioned itself as a leader in the software community and due to the strength growth of its user base for the Windows operating system and numerous other products, it became both widely popular and widely hated. Many consumers love the suite of products that Microsoft offers because they are easy to use, are widely supported, and have many applications written specifically to for them. On the other hand, there are many who dislike Microsoft, claiming that their policies lead to an uncompetitive market and that their practices are unethical. In recent years many court cases, including a major anti-trust suit have been brought against Microsoft. This paper aims to focus on the issue of Microsoft’s product pricing structure and to discuss the issues that have arisen because of it.
I believe that Microsoft has the best intensions for society, because they are constantly developing the software market into a more competitive and challenging industry. Microsoft’s success as a company is partly due to its commitment to making the best product possible and strategic business practices. The first reason Microsoft is not a monopoly is because of the standardized quality of its OS. Second is the intelligent business practices Microsoft has engaged in through many of its business partners. The legal issues of the alleged antitrust accusations from the department of justice are just totally overrated.
It was on Friday, November 5, 1999, that Judge Thomas Penfield Jackson had declared Microsoft a monopoly. So, it’s not a question of whether Microsoft is a monopoly, but more so a question of whether it should still be considered a monopoly today. I don’t think that Microsoft should currently be considered a monopoly, but I definitely do believe that it once was. The reason Microsoft should no longer be considered a monopoly is that there are several operating software that now compete with Microsoft. Two of the biggest competitors are Apples OS and Google Chrome's OS. Operating software’s like Apples’ OS and Google Chrome’s OS are close substitutes for Windows. One of the criteria for a firm to be a monopoly is that there are no close substitutes, “A firm is a monopoly if it is the sole seller of its product and if its product does not have any close substitutes (Mankiw 290).” And this
I don’t think the court should have given Microsoft a penalty anyway. I feel the government was harsh with just the fact Microsoft was considered a monopoly. I feel that the government should’ve just given Microsoft a fine and another form of compromise so they can ensure their conduct is up to par. In this way, there won’t have to be any worries about companies becoming monopolies.
Microsoft is the leading and the largest Software Company in the world. Found by William Gates and Paul Allen in 1975 Microsoft has grown and become a multibillion company in only ten years. It all started with a great vision – “a computer on every desk and every home” - that seemed almost impossible at the time. Now Microsoft has over 44,000 employees in 60 countries, net income of $3.45 billion and revenue of 11.36 billion. Company dramatic growth and success was driven by development and marketing of operational systems and personal productivity applications software.
Miller, R. (2012). Monopolistic Competition: The Micro View (17th ed. pp. 555-572). Boston, MA: Addison-Wesley.