| Although these are early examples, they represent in the most simple terms some of the key points of the department of justice’s case. Each of these examples can be argued, however in Microsoft’s favor. The original bundling of MS-DOS with IBM may have been a necessary move to ensure that the IBM would work correctly, and could even be blamed on IBM. The slow release of MS-DOS 5.0 could have been due to benign factors such as slow development, not an anticompetitive plot. Even the liscensing fee could have been a benign attempt to make up for DOS’s production costs, not a market stealing scheme. Where Microsoft truly gets into trouble, however, is in its bundling of software to gain dominance in all markets, including the internet. This is a more recent problem and is more controversial. By looking at this alone we can see if Microsoft is guilty of anticompetitive practices. With the release of Microsoft Windows, the company became a larger threat than ever before. Soon Microsoft began releasing the “suite” series. These were bundles of popular programs made to work perfectly together. In this way Microsoft began to bundle spreadsheet programs, word processors, art programs, as well as others together in one. By designing these programs together, Microsoft was able to make them completely compatible. In addition, Microsoft released these programs as soon as it released Windows, and by the time competitors could make their own programs compatible to Windows Microsoft already dominated the markets. Time magazine even said that by the time other companies could release products, “Microsoft already owned the markets.” In short Microsoft managed to destroy stronger competitors by bundling products quickly. Soon even former giants such as Wordperfect Pro, and Borland’s Spreadsheet were completely ruined, and bought out by other companies. In the internet market, Microsoft again dominated its competition. In what was called the “browser war”. Economists were predicting somewhere between $80 and $160 billion in internet business by the year 2000, and Microsoft knew that it needed a piece of this revenue to stay in power. Netscape Communicator was the fastest company to jump on the new internet, and thus gained early dominance. It began giving its browser away for free in 1994 in an attempt to defeat its competition, a browser called Mosaic developed by the government. Microsoft was slow to react to the Internet craze, but when it did, critics argue that it began to use its monopoly dominance to quickly take control of this fledgling market. By bundling its Internet Explorer with Windows and in the original release of Windows 95 not allowing other browsers to work on it, Microsoft began to gain dominance in this market as well. Although Microsoft fixed the incompatibility in response to government and public pressure, the damage had for the most part already been done. People and companies did not want to bother installing a new browser such as Netscape Communicator when Internet Explorer was already installed on their machines. Microsoft began to gain dominance and continues to battle other companies in the internet market to this day. It seems clear that by classic terms Microsoft has used anticompetitive practices to gain a business advantage and establish what would be considered by the Sherman Anti Trust Act a monopoly. The question becomes whether this is, as Microsoft asserts, a special case that should receive special consideration by lawmakers. Experts make some good points as to why Microsoft, while clearly somewhat guilty, may be a reason to change the laws on the books. One of the main anticompetitive practices Microsoft is accused of using is the bundling of products. Although the Sherman Anti-trust Act of 1890 is very vague, this sort of practice has been defined as illegal by lawmakers because it does not allow consumers to choose the products they want. Microsoft bundles both programs such as Microsoft Suites and Internet browsers into its Windows system. So, by classic definition, Microsoft may be using unfair practices in its business plan. One must consider the fact that Microsoft deals with a new industry. While if Standard Oil bundled two of its products together, it would clearly be a simple attempt to ruin competitors, in the computer it is a different situation. The operating system itself may lead to a monopoly. If a company has a successful operating system, such as Microsoft’s, there are several factors that will lead to the company looking like a monopoly in classic terms. |