| The monopoly laws now in place were established to ensure free enterprise and to promote economic growth. The times when these laws were made, however, were much different than times are today. Even if Microsoft has obtained classic monopoly status, does it necessarily mean that the company has broken the law? The question becomes whether the old laws can still be used in today's new business example. Different ideas on the meaning of monopoly and its implications have been published in written and electronic sources. Although some sources make very good cases against the company’s punishment, for the most part public opinion seems to be against Microsoft. Most experts and researchers agree that Microsoft has used illegal practices to obtain a monopoly status in the market of operating systems as well as the market for computer software. Starting with examples as early as the original release of MS-DOS, critics argue that Microsoft used tactics of leveraging deals and bundling software to gain dominance. Microsoft created MS-DOS for the larger company IBM, and thus had a powerful ally in pushing its product into the market. Microsoft did not completely create the DOS system at all, but bought it from another company. They bought it from a company called Seattle computer, and from the start the product was surrounded by controversy. Seattle computers had been accused of stealing the source code for the product that Microsoft bought from yet another company, Digital Research, which was considered at the time the predominant developer in the market. Furthermore, critics point out that Microsoft had IBM leverage its product by requiring that all software developed for the original IBM be compatable only with MS-DOS, and not with the products of the more powerful company Digital Research. Thus even in the beginning, Microsoft was able to use tactics that allowed it to beat out companies that were much larger than itself. Although almost everyone in the industry considered Digital Research’s product superior, MS-DOS quickly dominated the operating system market, due to its bundling with the popular IBM. Critics of Microsoft argue that even at this early of a point, this is a perfect example of Microsoft’s leveraging and bundling techniques that would later lead to the monopoly case. Another example of the types of tactics that have placed Microsoft in a battle with the government occurred only a few years after the initial release of MS-DOS in 1981. By 1986 Microsoft had a firm hold on the operating system market with the release of DOS version 3.3. Microsoft apparently became lazy and for years after did not improve on their product, yet maintained a strong hold on the marketplace. Digital Research again attempted to gain some market share with the release of its own version of DOS, DR-DOS. This version of the operating system was considered by most critics far superior to that of Microsoft, and threatened to take some of the market. In a controversial move, Microsoft immediately began to trumpet the release of its own DOS version 5.0. This slowed the sales of DR-DOS very considerably. Microsoft, however, did not actually release its version for over a year. In the meantime, consumers waited, and did not buy DR-DOS. Critics of Microsoft claim that this was an intentional move to stop Digital Research’s attempts yet again. What was perhaps Microsoft’s most dubious move so far occurred at the same time. Microsoft began requiring all manufacturers installing MS-DOS on any machine to pay a licensing fee to Microsoft for every machine they sold, whether they installed MS-DOS on it or not. Since the distributors would most likely need to install the system on at least one computer, they would almost definitely have to pay the fee. Thus it made little sense for them to pay for another operating system if they were already paying Microsoft for the right to install MS-DOS on their systems. In this way, critics argue, the company was making collusive deals that would allow them to one day completely dominate the market. |