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Microsoft Antitrust Investigation Paper

744 Words3 Pages

The purpose of this paper is to identify an antitrust investigation for a firm, to discuss the reason for the investigation, and the impact its impact on the firm. The paper also identifies the practices and power of monopoly and oligopoly market structures. It also discusses the advantages and disadvantages of monopoly market.
Discussion
Microsoft Antitrust Investigation
The law and economics of United States vs. Microsoft, is a landmark case of antitrust intervention in network industries. The Sherman's antitrust law in the areas that apply to the Microsoft case are "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 …show more content…

The monopolist is extracting a price from consumers that is above the cost of resources used in making the product and, consumers' needs and wants are not being satisfied, as the product is being under-consumed. Since monopolies are the only provider, they can set pretty much any price they choose, regardless of demand, because they know the consumer has no choice. They can also supply inferior products. Therefore, I believe that monopolies and oligopolies market structures are not customer friendly. For example, the area I live used to only use Comcast TV network because that was the only cable company serving that area which made them a monopoly. Residents did not have a choice but to use them if they wanted cable. Their prizes were very high; network was poor and had limited channels. It was difficulty for other cable companies to access the area. Customer s service was very poor especially once you have subscribed and sometimes, residents have to wait for days to get help if their services were interrupted for any reason. All of this was because Comcast monopolized the area at that time. After several complaints by residents, Verizon was allowed to service the area. This brought competition as customers now had a choice. Several residents made to switch from Comcast to Verizon which affected their sales. Comcast realizing the effects of the competition, started offering specials discounts, offered more channels and improved their customer service. This is one reason why competition is good because it benefits the customers versus monopoly that benefits the

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Some of the ways Monopolies because monopolies were through both horizontal and vertical integration, These two processes were the foundation of Industrial businesses like the Standard oil company led by Rockefeller and Carnegie steel, it allowed these power houses to control the amount of competition they had and how much it cost. These companies would have the reduced processing price because they set the price then sold it at a cheaper price, putting other businesses in shambles, An example of this is in (Doc H). This apparent genius of a process made it so people could only buy their product from them, it did allow for them to fix prices for items like food, fuel.(Doc A) this did allow for a sort of comfortable lifestyle that was defined as American consumerism. Through corporations like sears in the 1870s people were able to buy luxuries through this new affordable lifestyle. (Doc I).

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The United Sates v. Microsoft anti trust case was based on the United Sates Justice Department’s assertion that Microsoft was monopolizing the software industry and making it too difficult for competitors to engage in the industry. Specifically, they were focused on the fact that Microsoft included software for their own web browser, Internet Explorer, with the purchase of each Microsoft PC. The plaintiff claimed that this was unfair to competing web browsers such as Netscape. The Justice Department had already had issues with Microsoft’s business practices prior to the 1998 anti trust case.

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This shows how monopolies were such a big problem at the time because of how they got the president's attention. The historical context within document 3 shows how monopolies affected other companies that wanted to sell their product and flourish in the same marketplace. But, monopolies did allow the different companies to sell, which made it hard for the other companies to

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Cassidy (2014), states “It’s the predictable outcome of Congress bowing to the monopolists, or quasi-monopolists, and allowing them to squelch potential competitors.” I would have to agree with Cassidy’s statement here. A lot of these major companies support congress on their issues with business, therefore in turn congress allows them to have full control and continue monopolistic

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Monopoly is explained by being the only seller of something. Monopolies have the ability to price their product at any price on the demand curve. This becomes an issue because monopolies are more focused on maximizing their own profits

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The United States vs. Microsoft antitrust case involved the accusation that Microsoft was becoming a Monopoly and was engaging in abusive practices to stay in control of the market. In the case the judge ruled that Microsoft violated the Sherman Antitrust Act. The main violation was making deliberate choices to make the web browser on PCs connected to Windows operating system to stop any innovation. The point of these attempts was to make sure there were no other Intel compatible operating systems. Since Internet Explorer was downloaded on every Windows computer they made it difficult for other compatible browsers to come into the market.

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Monopolies were a huge way of making more money in the late nineteenth century. A monopoly is formed when a business is an exclusive manufacturer of product because it could provide a higher quantity of a good than its adversaries. This prevented competition between businesses and paved ways for fixed prices on goods. Monopolies were problematic because it increased unemployment and it wasn’t considerate towards the consumer themselves because if the goods were of low quality, they could not have any other option to go to. With the rise of monopolies including Rockefeller's Oil Company in Ohio, John Sherman: a senator promoted the Sherman Antitrust Act in 1890.

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We support the statement ‘Monopolies have led to the success of many economies in the world, and therefore, they should be maintained by government if they want their economies to continue enjoying economic growth and prosperity’. This is because monopolies are large in size, they benefit from economies of scale and are able to generate a huge amount of profit- larger than other market structures. With this money, they can invest in research & development, improving their existing products and creating new ones. Moreover, monopolies have a great impact on a country’s economy. Two very large monopolies that positively impacted the United States economy is Standard oil and Steel Company.

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These antitrust laws were viewed as an approach to advance equivalent rivalry for the upside of honest to goodness contenders. The fundamental statutes are the Sherman Act 1890, the Clayton Act 1914 and

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The freedoms that are hindered by these entities are the freedom to enter or not enter into a particular transaction by denying them any alternative and the freedom to not be affected by transactions in which you do not partake (Friedman, 1975). A monopoly deprives the consumer of the freedom of exchange; the consumer is forced to transact with a sole seller. Monopolies themselves come in different forms and deciding which monopoly will do less harm to the people, the monopolies need to be studied on a case-by-case basis. Most monopolies can be dealt with anti-trust laws to prevent them from coming to existence. Furthermore some monopolies need the government to stop supporting them in order to terminate its existence.

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Furthermore, the monopolies got rid of the competition so there was no competitive price point. This was not fair for the commoner because the businesses could change the cost of their products and people would have to pay what they charged. The United States has tried to remove all of the monopolies starting with President Theodore Roosevelt. Today there are practically no monopolies in the United States, but in two-thousand four Microsoft was sued for a monopoly of their product Microsoft Word, this was a very rare

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Since Microsoft was trying to become a monopoly within the technology market. They tried to achieve this monopoly by combining their operating system Microsoft Office and their internet browser Internet Explorer together in one convenient package. But the company should have followed the rules of the Sherman Antitrust Act which states “(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.'' (53 Anonymous April 4, 2000). Looking at this Act and the actions of Microsoft it is clear that the company was trying to create a monopoly over other companies that sold web browsers.

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The oligopoly market is set up in a way so that competitors can survive because each is unique and there are so few competitors that they are virtually indispensable even if some ethics atrocity

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That competitive market is necessary for customers to have the best service with affordable prices. Competition is what business is all about. When you have competition that is good for business and for the customers. It is good for the business because whoever has the best prices gets the most customers, which makes the most money, which is why they are successful. And that is the reason why it is good for the customer also.

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For example, If Google acquires Skype, it would be disastrous for Microsoft. Imagine if Google owned Skype and integrated it with its functions such as Google Apps, Gmail, Google Talk, and Google Voice. Even if Microsoft doesn't do a good job of integrating Skype into its own offerings, it can take Skype away from the competitors as well. On the other hand, this deal was regarded to be monopolistic. Two years later, Cisco opposed at the Luxembourg General Court about the European Commission’s approval of the $8.5 billion deal in 2011.

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