Microsoft Monopoly--Why was Microsoft investigated for antitrust behavior? Do yo
ID: 1229919 • Letter: M
Question
Microsoft Monopoly--Why was Microsoft investigated for antitrust behavior? Do you agree or disagree that Microsoft was trying to gain monopoly power in the computer software industry? Are monopolies always bad? Give at least one example of a case where having a monopoly may actually be a good thing.1. Write your individual answers to the questions listed above together using a minimum of 300 words in essay format in APA style [use APA template in Doc Sharing], using correct economic terms covered in the discussions. If you ONLY write 300 words, you probably won
Explanation / Answer
Microsoft was investigated for antitrust behavior after reports emerged that it was abusing its position as the leading provider of operating systems to computers (with over 95% market share). This led to lawmakers investigating the fact as to whether it was trying to establish a monopoly in the computer software market It is clear that Microsoft was trying to monopolize the industry. The facts that support this argument are: 1) Microsoft developed an entire range of products under the Microsoft Office package that would cater to the various requirements of professionals in every field - Microsoft Excel, Microsoft Word, Internet Explorer, Windows Media Player, Windows Movie maker which operated only on Windows operating systems 2) In the early stages on the internet, Microsoft tried to eliminate its competitor in the web browser indutry - Netscape Navigator - by pre-installing and integrating Internet Explorer free in its operating systems. Since Netscape had no foothold in the operating systems market, it lost out on an enormous market share. At its peak, Inernet Explorer held over 95% market share. Even today, while experts laud Firefox, Google Chrome, Opera and Safari browsers as much superior, Internet explorer is still dominant, thanks to its pre-integration in Windows 3) Microsoft has been found guilty of practices such as "exclusive dealings" - a regulation which gives it sole rights to a product, thereby preventing the entry of competitors into the market 4) Microsoft has a pricing schedule, that extensively benefits users of Windows, but which is a significant deterrent to the users of other operating systems However, the popular misconception is that monopolies are always bad. The effect of a monopoly depends upon two main factors - the provider and the market. There are certain obvious disadvantages: - artificial pricing - demand and supply mismatch (demand is always in short) - insufficient response to complaints - inability to switch to other products and services While a 100% monopoly is extremely rare, there are a large number of monopolistic groups (tow or more companies entering into an agreement to regulate market conditions artificially) However, monopolies are not always bad. For example: Google. Google Inc. has an enormous market share on various segments of the internet. However, it has delivered a large number of products to the satisfaction of the public, which has prevented them from reaching out to other markets, rather than the unavailability of options. Another example is the OPEC (Oil Producing and Exporting Countries). While it faces extensive criticisms, the group has regularly, whenever there is an unnatural spike in oil prices, increased production levels to enable drop in global prices