...Microsoft Monopoly Table of Content Introduction…………………………………………………………………………...page 2 Body…………………………………….………………….………………………… page 2 Conclusion…………………………………………………………………………..... page 3 References…………………………………………………………..……………....... page 5 Microsoft Monopoly In the late 1990s and into the millennium Microsoft was under litigation for anti-trust behavior. This lasted for many years, and was over Microsoft bundling its products into its operating system such as internet explorer. Some say that Microsoft was charging computer manufactures more money for their operating system if they installed Netscape instead of internet explorer when they sold the computer. Many states engaged in the lawsuit, along with some computer groups. Initially the DOJ or Department of Justice filed suit with in the Federal District Court stating that Microsoft violated an agreement signed in 1994, and asked that Microsoft stop bundling Internet Explorer in its operating system. The courts and Microsoft came to a settlement, after four long years. Bill Gates founder of Microsoft did not believe he Microsoft did anything wrong. However James Allchin, the Microsoft vice president for platforms who ran the development of XP, says that Microsoft learned several lessons from its antitrust experience, including that Microsoft needs to take a stronger leadership role in the industry. "We've been a leader--and we can do better," he says. Although Mr. Gates was unsure of what Mr. Allchin was talking...
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...Is Microsoft a Monopoly? Preliminary version April 4, 2000 Steven Cuellar Department of Economics San Jose State University San Jose, CA. 95129 Phone: (408) 924-5408 E-mail: SCuellar@email.sjsu.edu Presented at the Department of Economics Seminar San Jose State University San Jose CA. 95129 April 7 th 2000 Is Microsoft a Monopoly? 1 This would occur in the case natural monopoly in which economies of scale result in a single firm producing at a lower cost than a large number of smaller competitive firms. 1 Since the beginning of the antitrust trial against Microsoft there has been a great deal of commentary and analysis concerning the market position, pricing and strategic behavior of Microsoft. The courts Finding of Fact and the recent Conclusions of Law have intensified the interest in the case and resulted in even more analysis and questioning of the courts findings. This paper adds to the current list of Monday morning quarterbacks questioning among other issues: Whether or not Microsoft is a monopoly? Did they violate the antitrust laws? Have they harmed consumers? If the answer to previous questions is in the affirmative, then what remedies should be enacted? The purpose of this paper is to address the first and perhaps the most contentious question of whether or not Microsoft is a monopoly. Although most people have a general understanding of what a monopoly is, to eliminate any ambiguity it is helpful to establish a precise definition of monopoly...
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...Hallo classmates, My name is Richard Orina originally from Kenya but now residing at Hudson Wisconsin. I am married and we have three teenagers boys still living with us. Though they at times drive us crazy, it’s fun to have them around. I am excited to be part of this class and I hope to get the best out of it. I am not very new in accounting subject but maybe new on line yes. This is my third class here and I am not so sure how I’m going to draw a balance sheet and other financial statements online. I welcome any assistance that will help me get into the right footing since I have been out of class learning like 17 years. Currently I work at the hospital as a nurse leader, and have held this position for More than three years. I love the job but don’t feel complacent with what I am doing. My inner man is not at peace with me yet. I have a master’s and bachelor’s degree in business management and nursing degree. I have the touch and feeling of business studies though due to job market pressure I had to drift to nursing for survival. Given that I had much of my studies outside the country; it was very difficult to get a job based on those credentials. I did nursing because it guaranteed me a job to support myself and my family in the fastest manner. After so many years of off track, I am so delighted to pursue my dream in DBA. In the past, I have held teaching position at college level and it was fun though not well paying. My vision in...
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...The Microsoft Case Investigation into Microsoft began in 1991 by the Federal Trade Commission under suspicion that the company broke anti-trust laws and engaged in coercive activities prohibiting competitors from entering or participating equally in the market. “The plaintiffs alleged that Microsoft abused monopoly power and monopoly market structure on Intel-based personal computers in its handling of operating system sales and web browser sales “(The Microsoft Monopoly, 1998). The primary concern of the Federal Trade Commission and eventually, the Department of Justice, was whether Microsoft should be able to bundle its own web browser, Internet Explorer with the Microsoft Windows operating system. In 1998, The Department of Justice brought an antitrust suit against Microsoft. The suit included “twenty U.S. states suing Microsoft for illegally thwarting competition in order to protect and extend its software monopoly” (United States v Microsoft). In the end, “Judge Thomas Penfield Jackson ruled that Microsoft, with its Windows program, possessed monopoly power over a particular kind of operating system” (Rothstein, 2001). Later, the ruling was over-turned in the D.C. Circuit Court of Appeals and in September 2001, the DOJ announced that it was no longer seeking to break up Microsoft as previously ordered by Judge Jackson. It would instead impose less of a penalty. I agree that this bundling allowed Microsoft monopolized success over other browsers attempting to compete...
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...The regulation of Monopolies & the Microsoft Trial Research Paper Macroeconomics By: Ashleigh Magliano Introduction: Larger companies can become big threats to other smaller companies that are in a given market due to their power and innovation. Sometimes this can become more than a threat, and it turns to no competition at all between the markets due to the monopolization of a company. A company becomes a monopoly when it gains the control of the industry and has obtained the ability to change the output prices in that specific industry. With such power this opposes a threat to other businesses. The government has set up specific regulations for monopolies to control what they sell, how they sell it, and what services are allowed for consumers. The importance of regulating monopolies is to keep the market alive, to allow freedom for other smaller businesses. This keeps up competition in the market, and also keeps the monopolies from doing anything unreasonable. This has led to numerous trials on major companies, one of the biggest cases would be the trial against Microsoft INC. Acts for Regulating Monopolies: In 1890 the Sherman Antitrust act was put into effect, named after the Senator of Ohio, John Sherman and was the first component for congress to prohibit trust.(General Records of the United States Government, Record number 11) The Sherman Act intended by congress to help keep up competition in markets. Unfortunately the act was written to vague there were...
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...market structures, Monopoly, Oligopoly, Perfect Competition, and Monopolistic Competition. The way that these are differentiated is by the number of firms, barriers to entry, pricing decisions, output decisions, interdependence, LR profit, and P and MC. Microsoft is a great example of a Monopoly with the vast amount of products that they offer and no other firms to compete with for most of their products. However since they do have so many different products they can only classify as a Monopoly for some. Products such as X-box would not classify as a Monopoly product since there is competition in that market. Even though X-box would not classify as a Monopoly the vast majority of the products that Microsoft produces are. This makes it virtually impossible for any other firm to come along and enter this market. Microsoft is the undisputed leader in the market for operating systems (Sheremata 1997). The Microsoft Corporation has produced the vast majority of operating systems for all personal computers (PCs); moreover, operating systems that Microsoft has created are Windows95, Windows 3.1, and DOS. They also have produced the leading spreadsheet and word processors for both Windows and Macintosh operating systems. They own 85% of the market share with their office software Word, Excel, Powerpoint, Microsoft Exchange, and Microsoft Access. Not surprisingly, most of us have used some if not all of these products and/ or services provided by the Microsoft Corporation. How did...
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...MICROSOFT ACQUIRES LINUX Introduction The Microsoft Corporation is the largest diversified computer software company in the world. Linux is simply a computer operating system. The stable and flexible nature of Linux has attracted people to use it at home and work computers. Linux has many advantages like they are more stable, secure as well as robust. It is considered to be perfect storage of huge information database. As a competitive strategy, a marketer of a successful product may bundle a newer or less successful product with its stronger product as a means of edging its way into a new market. Perhaps the most famous example of this is Microsoft Corporation's bundling of various software applications. The comparative advantage of innovation and new technologies in the business activities made Microsoft become monopoly. If Microsoft acquires Linux, Microsoft will become still powerful. It would usually cause market failure. Moreover, considering the problem of market failure, Government intervention is inevitable in the case of Microsoft. Government filed a case as Microsoft acted as monopoly. Monopoly If a firm only one which can produces a certain goods, it has monopoly in that market for that good. There are so many buyers in the market and there is a restriction to new firm enters into the market. The monopoly firm produces and sells their output where MR=MC and get abnormal profits before the government regulate to them. The U.S vs. Microsoft case of 1998...
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...The Microsoft Case Sheriyl Robertson Shackemb@yahoo.com Content Introduction…………………………………………………………………………...page Subtitle 1 ……………………………….………………….………………………… page Subtitle 2 ……………………………….………………….………………………… page References………………………………………………………………………....... page Microsoft Monopoly Introduction In this paper I will discuss, why Microsoft was investigated for antitrust behavior? Present my opinion on if I agreed or disagreed the Microsoft was trying to gain monopoly power in the computer industry. Answer the question, “Are monopolies always bad”? And give an example of a case where having monopoly may be a good thing. Facts Microsoft produces the Window family of operating systems for personal computers and servers; also it produces applications software the run on the Windows family operating system. The most well-known are MS Office Suite which consists of Word, Excel, PowerPoint, Outlook, and Access; most of Microsoft products are complementary to members of the Windows family of operating systems for personal computers and servers. Microsoft was investigated for antitrust behavior after there were reports that Microsoft was abusing their position as the leading supplier of computer operating systems. Lawmakers investigated to see if Microsoft was trying to create a monopoly of the computer software market. They found that Microsoft was trying to cause a monopoly in the computer industry. Microsoft was sued by the US Department...
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...Introduction The Department of Justice investigated Microsoft Corporation for anti-trust behavior throughout the 1990’s. 19 States complained against Microsoft for practicing monopolistic behavior, following the investigation, the case went to trial. The following paper discusses the case against Microsoft, than talks about the monopoly market structure, and how it can affect society. United States of America V. Microsoft Corporation Microsoft Corporation, a multinational software corporation, was investigated for anti-trust behavior throughout the 1990’s. Complaints to the Federal Trade Commission (FTC), sparked an investigation on Microsoft corporation for using market power to monopolize web browsing software, which may prevented competing web browsers to gain marginal revenue. (Kleiner, 2011) In 1990, the FTC started investigating the Microsoft Corporation for monopoly (Brown, 1993), though in 1993 the FTC could not reach a conclusion if Microsoft practiced anti-trust behavior and further dropped the case (Keho, 1993). In 1994, The Department of Justice (DOJ) reopened the case, which resulted in a settlement between the complainants, the DOJ and Microsoft Corporation (U.S. Department of Justice, 1995). In May of 1998, 19 state plaintiffs and the DOJ filed a lawsuit against Microsoft, accusing the corporation for being a monopoly market structure by destroying competing threats posed to Microsoft. The company was accused for bundling their software to include with...
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...| Why was Microsoft Investigated for Antitrust Behavior? Karen Elmore ECON 312 Professor Guerman Kormilov Devry University Microsoft is a very large and diverse computer software company. It was investigated for antitrust behavior after there were reports that Microsoft was abusing their position as the leading supplier of computer operating systems. Lawmakers investigated to see if Microsoft was trying to create a monopoly of the computer software market. They found that Microsoft was trying to cause a monopoly in the computer industry. Here are the facts that support their findings. Microsoft developed Microsoft Office products that catered to the needs of professional in all types of fields, these products will only operate in a Windows operating system, which is a Microsoft system. When the early stages of the internet stared, Microsoft tried to push out and eliminate their competitors when it came to web browsing. It provided Internet Explore free of charge in all of their operating systems. This was at a time where people were being charged for AOL or Netscape Navigator. Microsoft was guilty of “exclusive dealing”. This is a regulation that gives them sole rights to a certain product. This prevented their competition from entering the market with their products. Microsoft used a pricing schedule which was a benefit for Windows users, but if you were on a different operating system products or services would cost more. This was often...
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...The Microsoft Case November 17, 2011 Week 3 Paper Introduction…………………………………………………………………………...02 The Case...……......................………….………………….………………………… 02 Conclusion………………………………………………………………………....... 03 References………………………………………………………………………....... 04 Introduction The purpose of this paper is to discuss the Microsoft Monopoly case and how it relates to what we have been learning in our Economics class. The Case In 1999 Microsoft was accused of violating the Sherman Act, which was passed in 1890 with the purpose of maintaining competition in the marketplace by opposing the combination of entities. Microsoft was positioned as the largest publisher of operating systems in the world and this was their third anti-trust trial in the United States. The charges of the alleged monopoly were whether Microsoft were allowed to bundle Internet Explorer with their Operating Systems. The major theory was that they were going to turn into the sole internet browser supplier because it came bundled with every new personal computer and every Microsoft operating system, causing a monopoly. By definition this simply is not the case as Microsoft were not the only producers and sellers of internet browsers, nor was there any blocking of new entries to the market. There were also plenty of close substitutes back in 1999, with the internet browser Netscape actually far more popular than Microsoft's Internet Explorer. There was a perception by Microsoft's competitors...
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...preserve competition as the rule of trade. Microsoft was accused of violating antitrust laws, and engaging in anti-competitive behavior by illegally using its Windows operating system monopoly. Netscape contended that Microsoft’s anticompetitive practices caused anti-trust injury by violating the Sherman Act. The Sherman Act The Sherman ACT of 1890 prohibits every contract, combination, or conspiracy that restrains trade, or any attempted or actual monopolization or conspiracy or combination to monopolize. While the Sherman Act does not ban all forms of trade, it does stop those that are considered unreasonable. Fixing prices, rigging bids, and dividing markets are all considered violations of the Sherman Act (Anonymous, 2012). It is not illegal for a company to have a monopoly in their industry. However, if the organization attempts to hold their monopoly status through ventures that exclude other companies from having a hold in the market, then the Sherman Act comes into play. Microsoft As most of the world is aware, Microsoft is a monopoly. AOL Time Warner accused Microsoft of engaging in illegal practices to maintain this monopoly (Well & McMillan, 2003). The alleged anticompetitive practices pertained to their Windows operating system. The suit claimed Microsoft held its position as a monopoly in the personal computer operating trade by unlawful exclusionary conduct (Ohlhausen, 2008). In layman’s terms, Microsoft required other products they manufactured...
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...The Microsoft Case Microsoft was being investigated for antitrust behavior because the company was suspect of violating the Sherman Act and obtaining monopoly power in the PC market. By doing this accusation the court had established that Microsoft Windows system was used on over 80% of the PCs that were Intel-based. To have such a higher percentage the pure monopoly was created by controlling the entire market of the product. This situation had been occurred because the firm had the patent of the product and the exclusive license to sell it. Windows was created to be an individual system of operation, and by integrated it with internet explorer, it created high barriers of entry into the PC market, by blocking their competitors Netscape to become a platform that will compete with Windows. Microsoft was also accused of anticompetitive practices by limitation the use of other companies’ products in their system of operation that were on the market. The Court also took in consideration if Microsoft acted like a monopolist. Microsoft argued that its behavior proves that it didn't act like a monopolist, but the Appellate Court disagreed. "Tellingly, the District Court found that some aspects of Microsoft's behavior are hard to explain unless Windows is a monopoly product," the decision reads. "For example, the company set the price of Windows without considering rivals' prices, something a firm without a monopoly would be unable to do." The ruling cited more examples, but the...
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...The Microsoft Case Microsoft was investigated for antitrust behavior after a U.S. court of appeals upheld a lower court’s finding that Microsoft used a series of illegal actions to maintain its monopoly in Intel-compatible PC operating systems (95 percent market share). (McConnell, 2012). US District Judge Thomas Penfield Jackson against Microsoft Corporation is a major blow to the largest US software company. Jackson upheld virtually all the contentions of the antitrust division of the Department of Justice, which brought suit against Microsoft for anti-competitive and predatory practices. Judge Jackson's finding of fact is unequivocal about Microsoft's crude and deliberate efforts to use its monopoly position in PC operating systems to gain control over other areas of the lucrative software industry, especially those related to the Internet and e-commerce. As the Wall Street Journal noted in its news report, "the judge came away convinced that the software company has behaved more like a thug in its dealings with competitors and customers." (McLaughlin, 2011). I do agree that Microsoft was trying to gain monopoly power in the computer software industry. Evidence that supports this are supported by the following facts: 1) During that time, Microsoft developed an entire range of products under the Microsoft Office that would cater to the various requirements of professionals in every field - Microsoft Excel, Microsoft Word, Internet Explorer, Windows Media Player, Windows...
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...The Justice Department and the states believe that Microsoft has used its monopoly in operating system software to protect its dominance and eliminate competitors. The government says that in the long run, consumers will be harmed, because there will be less competition and fewer choices. More specifically, the government contends that Microsoft has engaged in actions to preserve its Windows monopoly that violate antitrust laws. The government also maintains that the company has used the power of its Windows monopoly to attempt to monopolize the market for Internet browsing software. In addition, government lawyers allege that the company has committed other anti-competitive acts. Microsoft contends that it is simply trying to innovate its products. The company contends that its actions are legal and says that there's no grounds of consumer indignation over the practices that the government is targeting. If the government wins at the trial court, it has already specified that it wants Microsoft to cancel contracts deemed exclusionary. In addition, the government wants Microsoft either to strip out its Internet browsing technology from Windows 98 or to include a rival browser made by Netscape Communications Corp. The plaintiffs alleged that Microsoft abused monopoly power on Intel-based personal computers in its handling of operating system sales and web browser sales. The issue central to the case was whether Microsoft was allowed to bundle its flagship Internet Explorer...
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