...Monopolies have been around in American since it began. Some of the first monopolies are the reason for Americas advancement. But, what is a monopoly? As the book Economics: Private and Public Choice define it as” A market structure characterized by (1) a single seller of a well-defined product for which there are no good substitutes and (2) high barriers to the entry of any other firms into the market for that product”(). Though laws are in place to help big business not control all business but, some companies find ways to get around it. With business leaders like John D. Rockefeller, to Sergey Bring, Larry Page and Jonathan Wall googles founder’s monopolies are still thriving today but, in a different way. Starting back in the late 1800’s...
Words: 1417 - Pages: 6
...look at the history leading up to the filing, the government's argument, Microsoft's argument, and the outcome of the case. We will also look at the intent of the Sherman Anti-Trust Act. Specifically, how does the Sherman Anti-Trust Act protect consumers? Finally, we will discuss whether the anti-trust legislation actually accomplishes what it is intended to do, with respect to the technology industry. Microsoft has been under constant scrutiny since June 1990 when the Federal Trade Commission (FTC) launched a probe into the possible collusion between Microsoft and IBM. Three years later, the FTC handed over their investigation to the U.S. Department of Justice. After years of accusations for monopolizing and engaging in anti-competitive acts, Microsoft finally, on May 18, 1998, received a suit for violation of federal anti-trust laws.[i] The suit alleges that Microsoft is in violation of Sections 1 and 2 of the Sherman Anti-Trust Act, and seeks to prohibit Microsoft from selling certain products and engaging in certain sales practices. Time Line of Events [pic][ii] The government's complaint contains four counts: 1. Microsoft illegally monopolized the market for operating systems (“OSs”) for personal computers (“PCs”) under paragraph 2 of the Sherman Anti-Trust Act.[iii] 2. Microsoft had anti-competitive contractual arrangements with various vendors of related goods,...
Words: 2315 - Pages: 10
...government filed suit against Microsoft on May, 18, 1998 because they were concerned that the company was using the power of it enormous market share in the PC operating system market to exert undue influence on the market prices and competition. The government also alleged that Microsoft had engaged in anticompetitive conduct in violation of § 1 and § 2 of the Sherman Act. Although the investigation really began in 1993 when Microsoft’s marketing tactics had sparked the Department of Justice’s interest in the business dealings of the company in order to conclude whether or not the company was partaking in monopolistic practices. This Department of Justice investigation was directly subsequent to two deadlocked probes by the Federal Trade Commission that were initiated in 1990 ("Wired.com”). During the 1993 investigation the Department of Justice found that indeed Microsoft was abusing the monopoly power it possessed over the PC operating systems markets. Monopoly Powers are generally defined as the absence or ineffectiveness of competitive constraints on price, output, product decisions and quality. The Supreme Court defines monopoly power as ''the power to control prices or exclude competition.'' A firm is known to be monopolistic if it can successfully raise prices substantially above the competitive level. The investigation found that Microsoft had been using its licensing agreements with the PC hardware manufacturers or OEMs to force the bundling of the windows 95 operating systems...
Words: 2041 - Pages: 9
...THE STATES SIDE Microsoft has clearly mistreated monopoly influence in its usage of its operating system. The fact that Microsoft bundled Internet Explorer with its Windows system without a doubt gave them an advantage over the web browser market; given that many businesses, households and even PDA computers have the Window Software. Microsoft made other web browsers slow even over a modem. To give them a way out of monopolistic illegal practices they included other web browser logos on the windows Operating System, but these other browsers would not work properly or became slow to use. “They manipulated and altered its application programming interfaces (APIs) to favor Internet Explorer over third party web browsers’. (Wikipedia.org) Microsoft could have made Internet Explorer a separate entity and did not need to be tied into Windows. Take the separate version for Mac OS for example, Mac OS works off a different operating system, but also has access to Internet Explorer. It has also been said that Microsoft also required PC manufacturers to contain its internet browser as an element of setting up the Windows System. Microsoft stated that Internet Explorer was free to all windows users, however we can only assume that the price of Windows Operating System was overly priced or prices were kept high to cover the cost of development and marketing for Internet Explorer; so in the end it may not have been free at all. (Wikipedia.org) During questioning, guilty was the only...
Words: 576 - Pages: 3
...2012 Final Journal Topic: Monopoly and Antitrust The market power of either buyers or sellers, harms buyers who may have the opportunity to buy at competitive prices. It also reduces the production, which causes a deadweight loss. Excessive market power also raises issues of equity and justice, because if a company has too much monopoly power, it makes profit at the expense of consumers. A monopoly is a situation in which there is a single supplier or seller of a good or service for which there are no close substitutes. Economists and others have long known that unregulated monopolies tend to damage the economy by (1) charging higher prices, (2) providing inferior goods and services and (3) suppressing innovation, as compared with a competitive situation (i.e., the existence of numerous, competing suppliers of the good or service).[1] In theory, the Government or State could collect the excess profits that the company obtained through taxes and then redistribute it among the buyers of the product. However, this redistribution is usually not feasible. It is difficult to ascertain what proportion of the profits of an enterprise is attributable to monopoly power and it is even more difficult to locate all buyers and reimburse them an amount proportional to their purchases. How can society, then, limit the market power and prevent the anti-competitively use of it? In the case of a natural monopoly, i.e. an electricity/power company...
Words: 2628 - Pages: 11
...CORPORATION, ) 466 Ellis Street ) Mountain View, California, ) ) Plaintiff, ) ) v. ) ) MICROSOFT CORPORATION, ) One Microsoft Way ) Redmond, Washington, ) ) Defendant. ) ) ____________________________________ ) Civil Action No. _____ JURY TRIAL DEMANDED (Per Local Civil Rule 40.5, Related to Civil Action Nos. 98-1232 and 98-1233) COMPLAINT This action follows the determination of Microsoft Corporation’s (“Microsoft”) antitrust liability in United States v. Microsoft, Civil Action Nos. 98-1232 and 98-1233, unanimously affirmed by the Court of Appeals, where it was found that Microsoft’s illegal acts had “inflicted considerable harm on Netscape’s business.” Netscape Communications Corporation (“Netscape”) thus brings this action against Microsoft to prevent further injury to Netscape, to restore competition lost in the market for Web browsers, to foster competition in the market for operating systems, and to receive treble damages compensation for the harms inflicted upon it by Microsoft. Netscape seeks this relief under Sections 1 and 2 of the Sherman Act, sections 28-4502, 4503, 4508, and 4510 of the District of Columbia Code, and under the common law, for harm resulting from Microsoft’s anticompetitive conduct in the markets for Intelcompatible personal computer (“PC”) operating systems and Web browsers worldwide. Plaintiff alleges as follows: Nature of The Action 1. In 1994, the year Netscape was founded, it released the final version of its initial Web browser product...
Words: 4949 - Pages: 20
...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...
Words: 2220 - Pages: 9
...than everyone else; so much so that they are the only ones that can effectively provide it. When this occurs, competing businesses and giant government entities will stop at nothing to shut it down. The Sherman Antitrust Act, the Clayton Act, and the Federal Trade Commission Act make up the current US antitrust laws. The antitrust laws are supposed to promote and protect competition. The philosophy behind the laws is that trusts and monopolies will stagnate markets and prevent others from engaging in healthy market competition. A monopoly is defined as a situation in which a single company owns all or nearly all of the market for a given type of product or service. (Investorwords, 2010) Antitrust law legislation started with the Sherman Act that was passed in 1890. The intent of the law was put in place to challenge the unchecked growth of corporations. By 1888, large corporations gained enough market muscle to dominate entire industries. The Sherman Act outlaws all contracts, combinations, and conspiracies that unreasonably restrain interstate trade. This includes agreements among competitors to fix prices, rig bids and allocate consumers. The Act also makes it a crime to monopolize any part of interstate commerce. Criminal prosecution will be filed if the Sherman act is violated. If found guilty, the violator can be fined up to $1 million and sentenced up to 10 years in federal...
Words: 3898 - Pages: 16
...The Microsoft Antitrust Case* by Nicholas Economides** Revised April 2, 2001 Abstract This paper analyzes the law and economics of United States v. Microsoft, a landmark case of antitrust intervention in network industries. The United States Department of Justice and 19 States sued Microsoft alleging (i) that it monopolized the market for operating systems of personal computers and took anti-competitive actions to illegally maintain its monopoly; (ii) that it attempted to monopolize the market for Internet browsers because such browsers would create competition for operating systems; (iii) that it bundled its browser (Internet Explorer) with Windows; and that it engaged in a number of other anti-competitive exclusionary arrangements with computer manufacturers, Internet service providers, and content providers attempting to thwart the distribution of Netscape’s browser. The District Court Judge found in most points for the plaintiffs and ordered the breakup of Microsoft into two companies, one with all the operating systems software, and one with all other products of the company. The District Court also imposed a number of severe restrictions on the business conduct of Microsoft. We analyze the economic issues related to liability. We also analyze the applicability and effectiveness of the remedies imposed by the District Court and contrast them with other potential remedies. * Forthcoming in Journal of Industry, Competition and Trade: From Theory to Policy (August 2001)...
Words: 17051 - Pages: 69
...Individual Essay Bill Gates has been the richest man on the planet for the majority of two decades, and he’s getting wealthier constantly. He was born on October 28, 1995 in Seattle, Washington. He was a very ingenious student. Bill Gates started to demonstrate an enthusiasm for Computer programming at just 13 years old. He persuades his passion towards computer programming with the help from his close friend and business partner Paul Allen. Through attractive innovation, sharp business strategy and aggressive business tactics, he created the biggest software company, Microsoft which worth up to $340.8 billion. He was been criticized for his aggressive business tactics and which have been considered anti-competitive, a supposition which has sometimes been controlled through various court rulings. In the later phases of his career Gates has sought after various humanitarian tries, giving a lot of cash to various charitable organizations and scientific research programs through his foundation, established in 2000. In his early career, he got selected into Harvard University in 1973 to persuade his career as lawyer. Gates didn’t forget to contact with his colleague Paul Allen, who was moved to Boston, Massachusetts, to work for Honeywell and Gates joined Allen at Honeywell. Amid this time, Gates and Allen were fascinated by the article on a popular magazine about their Altair 8800 Mini PC pack. Best friends, were enchanted with the potential results that this PC could make a...
Words: 2841 - Pages: 12
...William (Bill) H. Gates is chairman of Microsoft Corporation, the worldwide leader in software, services and solutions that help people and businesses realize their full potential. On June 27, 2008, Gates transitioned out of a day-to-day role in the company to spend more time on his global health and education work at the Bill & Melinda Gates Foundation. He shares his thoughts about the foundation and other topics on Gates Notes, a Web site launched in January 2010. Gates continues to serve as Microsoft's chairman and as an advisor on key development projects. In June 2006, Craig Mundie assumed the new title of chief research and strategy officer at Microsoft and is responsible for the company's research and incubation efforts. 1. Bill Gates’ early life 1.1 Family Born on Oct. 28, 1955, Gates grew up in Seattle with his two sisters. Their father, William H. Gates II, is a Seattle attorney. Their late mother, Mary Gates, was a schoolteacher, University of Washington regent, and chairwoman of United Way International. 1.2 Education Gates attended public elementary school and the private Lakeside School. There, he discovered his interest in software and began programming computers at age 13. In 1973, Gates entered Harvard University as a freshman, where he lived down the hall from Steve Ballmer, now Microsoft's chief executive officer. While at Harvard, Gates developed a version of the programming language BASIC for the first microcomputer - the MITS Altair. 1.3 Personal...
Words: 7316 - Pages: 30
...Creating Competition in the Market for Operating Systems: A Structural Remedy for Microsoft Thomas M. Lenard, Ph.D. Vice President for Research The Progress & Freedom Foundation January 2000 ©Copyright 2000, The Progress & Freedom Foundation. All rights reserved. TABLE OF CONTENTS EXECUTIVE SUMMARY iii I. INTRODUCTION 1 II. MICROSOFT’S OPERATING SYSTEM MONOPOLY 3 III. NEW MARKET DEVELOPMENTS 5 A. America Online/Netscape Merger 5 B. America Online/ Time Warner Merger 6 C. Linux 6 D. Information Appliances 6 E. Web-Based Computing 7 IV. ANTICOMPETITIVE ACTS: THE NETSCAPE BROWSER 8 A. Market Division Proposal 9 B. Exclusive Arrangements with Original Equipment Manufacturers (OEMs) 9 C. Exclusive Arrangements with Internet Access Providers (IAPs) 10 V. OTHER ANTICOMPETITIVE ACTS 12 A. Java 12 B. Intel 12 C. IBM 13 VI. HARM TO CONSUMERS 14 VII. ALTERNATIVE REMEDIES 16 A. Conduct Remedies 16 B. Structural Remedies 17 1. Functional Divestiture 18 2. Full Division Remedy 19 3. One-Time Licensing Auction 21 VIII. The Hybrid Structural Remedy 22 A. The Minimum Scope of the Windows Company 23 B. The Applications Company 24 C. Addition of Products into the Windows Companies 25 D. Other Operational Issues 26 1. Shareholders 26 2. Intellectual Property 27 3. Employees 27 4. Contracts 28 ...
Words: 15664 - Pages: 63
...9-700-082 DEBORA SPAR Forever: De Beers and U.S. Antitrust Law Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F267708 CoursePack code C-788-275379-STU “As a worldwide dealer in enchanting illusions, Disney has nothing on De Beers.” - The Economist1 In 1999, a series of spectacular advertisements adorned the bus-sides and billboards of major American cities. Set against a lush black background, the ads displayed a perfect set of diamond earrings, or a single sparkling solitaire. The lettering, in white, was sparse and to the point: “What better time to celebrate the timelessness of love?” they asked. Or, “What are you waiting for, the year 3000?” Some were even more direct: “This wouldn't exactly be the year,” they noted, “to give her a toaster oven.” Coyly, the ads captured a joint fascination with the new millennium and the enduring allure of diamonds. How better to capture time than with a diamond, they urged. How better to herald eternal love? Indeed. According to analysts, U.S. diamond sales (30% of which occurred during the Christmas season) were expected to surge by more than 10%, hitting a high of over $20 billion for 1999.2 A significant portion of this windfall would flow to De Beers, one of the world’s most successful corporations and the controlling force of the international diamond market. There were many ironies behind De Beers’s millennial campaign, not least of which was that diamonds...
Words: 13029 - Pages: 53
...CHAPTER 10 PERFECT COMPETITION Assumptions of Perfect Competition The most competitive market structure is pure or perfect competition, which is as competitive as possible. As previously mentioned, market structures are models that summarize how certain markets are organized and behave. For each market structure we have a set of assumptions or characteristics that tell us what kind of industries the model will explain. Only industries that meet the assumptions will behave in the way the model predicts. The assumptions of perfect competition are: Many buyers and sellers: There are so many buyers and sellers in perfect competition that no one of them has any influence whatsoever on the market. The number of consumers and producers is so great that any one of them is like a cup of water in the ocean – their presence or absence makes no difference at all to the market. Identical or homogenous product: Every producer in the market makes exactly the same product – consumers are not able to distinguish between the output of one firm and the output of another. There are no labels, brands or any other distinguishing features used to make a product look distinct. Excellent information: Both buyers and sellers in this market have good information about the product, especially the fact that there are many other producers all making the same product. Relatively free entry and exit: Firms are able to move resources in and...
Words: 15661 - Pages: 63
...CONTENT PREFACE …………………………………………………………………….…..…3 CHAPTER 1 Theoretical basics of mergers and acquisitions processes………..........5 1.1. The economic substance of M&A ………………………………………………5 1.2. Financing M&A…………………………………………………………………9 1.3. Valuation matters……………………………………………………………….11 1.4. M&A failure……………………………………………………………………13 CHAPTER 2 International M&A experience..............................................................16 2.2. The M&A practice in European countries…………………………………….16 2.3. The M&A experience in USA…………………………………………………22 CHAPTER 3 Mergers and acquisitions in Ukraine.....................................................32 3.2. Legislature of Ukraine in the sphere of M&A………………………………...32 3.3. M&A of Ukrainian corporations…………………………………………........33 3.4. M&A of Ukrainian banks……………………………………………………..40 CONCLUSION...........................................................................................................46 REFERENCES...........................….………………………………………………...48 PREFACE Strategic factor in the success of companies on global markets and increasing international competitiveness is the growth their market value. Current global trends show an increasing relevance of financial management, which deals with the dynamics of cost and capital structure of companies, institutions of financial flows. Achieve business objectives may be able through...
Words: 12388 - Pages: 50
