Beth Nolan

English 101

Ms. Hobey

9 December, 1999

The Computer Monopoly

Microsoft Corporation has been considered a monopoly since it became the largest computer company in existence. Bill Gates founded the company and is its president. He is now the wealthiest man alive because of the tremendous growth of his company in such a relatively short time. A monopoly is an illegal occurrence when a single company buys out all of its' competitors and so becomes the only option for consumers to consider to buy products. The stock market can be greatly affected by such monopolies, and as a result this can affect the country's economy. The U.S. Government tries to do as much as possible to control illegal monopolies. Recently, the government fought a legal battle with Microsoft Corporation, claiming that it is indeed a monopoly. Microsoft Corporation is a monopoly, and because of its control over the computer industry by being the largest and most successful company, it has crushed any potential competitors.

Microsoft is a company that has had a greater impact on society than any other company. Microsoft makes the operating systems Windows95, Windows98, and Windows NT, which are not only some of the most widely available operating systems, but are also needed in order for computers to run software programs. It's also the world leader in software production and its applications such as Microsoft Word, Excel Spreadsheets, Word Perfect, and PowerPoint are also used internationally. Microsoft Internet Explorer, a web browser which is an application to access the internet and web pages, and it is one of the top web browsers available to consumers. Microsoft has grown rapidly in such a short amount of time to become one of the most well-known brand names in the world.

Bill Gates founded Microsoft in the mid 1970's. Microsoft's goal was to make the personal computer (also known as the PC) available in every business, school, and home in the United States. The company worked from the ground up, and many times if Bill Gates could not steal the information about programming languages or software from his competitors, he would buy the smaller companies in order to add new or better features to his own operating systems and programs. In just 23 years, Microsoft's revenues have gone from $16,005 in 1975 to a staggering $14.48 billion just last year in 1998. Microsoft is currently the world's leading software provider. Now, still only in his forties, Bill Gates is the wealthiest man in the United States, worth several billion dollars.

Microsoft Corporation has been declared to be a monopoly according to the United States government. A monopoly is when one company is illegally cornering the market and no other competitors have a chance to compete with them at all. This affects the consumer directly because the price will be affected if only one company creates a certain product, which the consumer needs or wants. Monopolies greatly affect the stock market because of this and they should not be allowed to obtain money illegally.

The United States government does not control trade, yet it does try to prevent monopolies and illegal transactions in the stock market. The government has enough power to hurt monopolies, but in the case with Microsoft, they are fighting one of the major world corporations and may not be able to do much. The government affects business because it has some laws to restrict certain things from happening in corporations and the stock market.

The stock market has changed dramatically in the past few years. The surge of technology stocks during this information age has boosted the economy, although many of the technology stocks are still considered risky, many of the basic stocks are a very good investment. Monopolies such as Microsoft, however, can affect the stock market and hurt the consumer because it is preventing any competitors from getting their products to the people, when actually some of these new products may be better.

In the recent court case between the U.S. Government and Microsoft, the U.S. Government claimed that Microsoft was a monopoly. It was decided that Microsoft is a monopoly, but the real outcome to the case will not come for a few more months to see whether Microsoft will be broken down into smaller companies or have to pay a fine. "As we work to resolve this lawsuit, our 30,000 employees will stay focused on developing innovative new products. Our industry is so competitive and the technology is changing so rapidly that we have to keep our focus," Gates said. U.S. District Judge Thomas Penfield Jackson presided over this case, and has advised the sides to settle. Marc Schildkraut, who was formerly of the Federal Trade Commission, investigated Microsoft in the 1990's. He said, "A lot of judges would inquire it's not out of bounds to do something like that. It's maybe even more likely in this situation. This judge seems really interesting in setting up the process." Encouraging the lawyers to settle is one key example that Judge Jackson is handling the trial in a unique way, and it is different than what most judges would do.

Many people argue whether or not the United States government should have the power to infringe upon any privately operated business. There are guidelines to businesses and corporations, however, so they use these guidelines to decide if they should add more government control to certain industries or businesses. Boston Globe Columnist Hiawatha Bray said, " It's the abuse of such power that should concern the government. With its baser impulses in check, Microsoft will remain just about as fearsome and tough to beat as ever. And rival software execs will have to settle for living in $10 million mansions." The competitors in the computer industry simply do not have the same power that Bill Gates and Microsoft has. In this case, Microsoft is such a large and powerful corporation that it could dramatically affect the United States economy either way the case is decided.

The United States versus Microsoft case has been in the public eye because of the importance of the outcome. Bill Gates appeared on "Good Morning America" and promised to discuss "any sort of resolution" to the court battle. Bill Gates said, "In this industry, no company has a guaranteed position. Microsoft has succeeded because we have been guided by the most basic American values: innovation, integrity, serving customers, partnership, quality and giving to the community. We compete vigorously, but fairly." The media is an important way for Bill Gates to voice his opinions to the viewers who are also consumers. "If we can't add Internet support, we can't add any new features, if we can't define the user experience of Windows so that all Windows machines operate the same way, then the Windows brand becomes absolutely meaningless. No company should accept these kinds of limitations on their ability to innovate." he told Microsoft shareholders. The media has shown both sides of the case accordingly, yet, Microsoft does co-own the cable television channel MSNBC and has strong controls of the media through the internet.

Many others disagree with this statement because of the actions Microsoft has taken to reach it's current status as the world leader in computer software. Microsoft has negatively affected many of it's competitors through the years and has had several court cases concerning these issues. "Perhaps the most impressive example is when Microsoft threatened to stop producing its office software suite for Apple Computer Inc.'s Macintosh computers unless Apple agreed to use Internet Explorer as its primary browser rather than Netscape Communications Corp.'s Navigator. Keep in mind that Microsoft makes the only top-of-the-line office suite for the Mac, and earns a lot of money from it. Still, the company seemed willing to kill it to get a better grip on Netscape's throat."

Microsoft still makes software for Apple Computers but it wants to be the dominant company overall and have Microsoft Internet Explorer be the essential web browser for the internet. Another prime example of how Microsoft has hurt its competitors in the computer industry is with America Online. " …Microsoft, moving in on a popular Internet phenomenon, unveiled free software that let users send instant messages to each other or to users of America Online's rival system. AOL, saying the Microsoft software essentially hacked into its servers without authorization, blocked the capability." Microsoft copied AOL's instant messenger with it's own to make their service more appealing to the consumers.

The final outcome of the court case is still uncertain; it may take a few months to decide what will happen to Microsoft and how that will affect our economy. A final decision in the case could come as early as February, 2000. However, it is speculated that the different components of Microsoft are worth even more if they are split up individually than the whole company put together. Ironically, this case may make the wealthiest man in the world even richer. What is left of Microsoft and all of its components will be a major powerhouse in the world of computers no matter what the final result of the court case is. Microsoft is a monopoly and the United States government has decided that it is, and this decision will make an impact on the computer and internet industry as well as the world.

Works Cited

Bray, Hiawatha. "Upgrade: A Bigger Threat" The Boston Globe November 18, 1999: C01

Bridis, Ted. Associated Press. "Judge Meets with Lawyers in Microsoft Trial" The Boston Globe November 19, 1999: C03

"Gates Faces Settlement Choices" The Boston Globe November 18, 1999: C02

"Software Giant Halts AOL Fight" The Boston Globe November 18th, 1999: C02