Antitrust Claims
Antitrust represents an uneasy compromise between laissez faire and interventionist visions of public policy. It recognizes the need for governmental involvement in the economy beyond the protection of property rights; yet it rejects overt control of market outcomes. The appropriate degree of governmental involvement for antitrust policy remains a contentious issue. Laissez faire and interventionist economic theories have competed for influence in antitrust decision making ever since the enactment of the Sherman Act of 1890. Antitrust laws were adopted by Congress to outlaw or restrict business practices considered to be monopolizing or which restrain interstate commerce. The Sherman Antitrust Act of 1890 declared every contract, combination or conspiracy in restraint of trade or commerce between states of foreign countries to be illegal. Clayton Antitrust Act of 1914, was amended by the Robinson-Patman Act of 1936, prohibits discrimination among customers through pricing and disallows mergers, acquisitions or takeovers of one firm by another if the effect will substantially lessen competition. The Antitrust Division of the United States Department of Justice enforces for the federal government, but private lawsuits to halt antitrust activities have become popular, particularly since attorneys fees are awarded to the winning party. This act is seen to be a legal specialty that has kept a few industries honest.
The world’s largest media company and Microsoft, the biggest software maker, have squared off on several fronts in recent years. New York-based AOL Time Warner sued Redmond, Washington based Microsoft in January 2002. The lawsuit alleged that Microsoft used anticompetitive practices to ensure that its Internet Explorer browser would dominate Netscape Navigator. America Online bought Netscape for $10 billion in 1999, but has not used its browser in AOL's client software. Microsoft said it will provide AOL with technical information to ensure that its products run well on Windows, and the companies also plan to explore how to integrate their instant-messaging software.
According to Aaron Ricadela (2003), Gates and Parsons emphasized the importance of the deal to building a technical infrastructure that ensures consumers can conveniently purchase digitally delivered music, films, and television programming, while protecting copyright holders. According to Ricadela (2003), Parsons stated the market for these products won't expand unless AOL Time Warner creates a platform that can secure multiple forms of content, on multiple computing platforms. The holdup has obviously been piracy.
The claims against Microsoft are valid claims. Microsoft has monopolized the computer arena since day one of its existence. The vast majority of the world's personal computers, estimates range from 80 percent to more than 90 percent, run on Microsoft software from the instant they are turned on. In 1999 Microsoft’s future could not be more assured than any other company. The Internet posed a threat along with a new set of standards that Microsoft could not control. Microsoft was threat to itself. The threat came with Microsoft’s self fulfilling destiny of any monopolist. Microsoft could have failed to drive consumers to new waves of upgrades. The company could have stagnated financially as it retained a grip on the market. Microsoft in a sense is a capitalistic business. No company has Microsoft’s power to place bets. There are few companies that can afford to chance a new approach in a product category near the advancing boundary of Microsoft’s Window package. Microsoft’s attitude is that consumers should be grateful that they have the ability to put a computer on every desk and in every home, all running Microsoft software while connecting to the Internet.