Is Microsoft a Monopoly?
The very reason that Microsoft was charged with an anti-trust case way back in 1998 is because it was dominating the computer business by way of bundling its operating system. A consumer cannot get its operating system when he/she does not also buy the Microsoft software programs. Microsoft also indicated monopolistic competition when it gave out free browser and toppled its then rival, Netscape. (Economides, 2003) The federal government accused Microsoft of stifling competition by making it extra difficult to install other software running on the Windows’ operating system.
I definitely agree that Microsoft is violating the anti-trust law. It was monopolizing the operating systems market. According to the Sherman Antitrust Act (Section 2), no person shall monopolize or attempt to monopolize or even conspire with other persons or groups to monopolize trading among various US states or other nations. (Ibid.) This equates to a felony.
There is anti competition because the fair and efficient market system is violated when it coerce the computer manufacturers as well as the buyers to patronize their own operating system and their software against being able to choose freely among competing software or other operating systems. (Evans, Nichols & Reddy, 1999) In simply terms, the company is hiding a secret code that makes it hard for non Windows operating machines to run the Microsoft programs. In a perfectly competing computer market, businesses provide similar products or services. Since, the consumer have ample choices, they can pick their best options at fair market prices. This does not happen when one business tries to monopolize the market and command high prices for their products or services because no other business can supply this product or service. In this case, a monopoly exists. The absence of the interplay of competition makes it an anti-trust case. Another aspect is that it locks in its suppliers and middlemen to sell only their software and their operating systems. There are bribery, coercion and other unfair trade practices involved in these practices. (Ibid.)
In the actual market, Microsoft is dominating with a ninety percent hold of the market share. (Economides, 2003) Linux and Macintosh also have a small share of the market. Monopoly then exists because Microsoft can set its prices higher than the market prices since there are no strict competitors. It can also interchange the supply of its products to make it more in demand. Afterwards, they can be made to increase its prices. In other words, with a monopoly, market can be manipulated. Competitors are also coerced to lose in the process.
Sometimes, there are instances when the monopolistic conditions can be beneficial to the market. Take for example the case of patents. When they are given exclusive rights by the government, they sell their products or services exclusively. While there are cases when patent holders extract more market value for their inventions, it is generally the case when the patented product or service is really superior and no other product or service can compete with it in the market.
This type of monopoly also puts incentives to great inventions so that eventually, the consuemrs are benefitted and protected. (Economides, 2003) If patents are not given, then, market competitiors will mimic the inventions and produce inferior products to the detriment of the users. Often, patents are extended to drug makers and pharmaceuticals.
References:
Economides, N. (April 2003). The Microsoft Antitrust Case. A Case Study for MBA Students. Stern School of Business. New York University. Retrieved from, https://docs.google.com/viewer?a=v&q=cache:7-ZO0PDm74wJ:www.stern.nyu.edu/networks/homeworks/Microsoft_Case.pdf+why+was+microsoft+charged+with+antitrust+case%3F&hl=tl&gl=ph&pid=bl&srcid=ADGEESj5RPu2UgC4E7nk7wYrNANRROWvu45fwrzYKxI5N_EknRSWOijAaoDQMZKgvm4gJ6iT3fZquz4ZNPpEdfVY5dZcPT_-gV0QEoiBxySmvzSWwYvsdF8DtXePkkiQKTVgBUo8KIqY&sig=AHIEtbQCMDiwq6LCB5SUS9X0XtWUYxUW-g.
Evans, D. S., A. Nichols & B. Reddy. (1999). The Rise And Fall Of Leaders In Personal Computer Software. Mimeo., NERA.
