Is Microsoft a Monopoly?
In a celebrated antitrust case tried in 1998, The Department of Justice charged Microsoft Corporation with a wide range of anti-competitive behavior. Among the charges leveled by the DOJ was the allegation that Microsoft illegally bundled the sale of its Microsoft Explorer Internet browser software with its basic Windows operating system. DOJ alleged that by offering a free browser program Microsoft was able to extend its operating system monopoly and substantially lessen competition and tend to create a monopoly in the browser market by undercutting rival Netscape.
Microsoft retorted that it had the right to innovate and broaden the capability of its operating system software over time. Moreover, Microsoft noted that Netscape distributed its rival Internet browser software Netscape Navigator free to customers and that it was merely meeting the competition by offering its own free browser program. Question: Did Microsoft’s bundling of free Internet browser software with its Windows operating system violate U.S. antitrust laws? Is combining one product with another a violation of the provisions of the Sherman Act? Discuss. Did Microsoft’s bundling of Microsoft Explorer with Windows extend its operating system’s monopoly and substantially lessen competition?
Discuss. Did Microsoft, as a result of these practices, create a monopoly in the browser market? Has society benefitted from Microsoft software? Isn’t true that Microsoft’s software has helped make personal computers more accessible and more affordable to millions? Discuss. You may want to watch Bill Gates’ deposition available (part 1) at https://www.youtube.com/watch?v=m_2m1qdqieE and (part 2) at https://www.youtube.com/watch?v=TyM7RpU6cHc .
You may also want to use material at the Department of Justice Antitrust Division: United States v. Microsoft Corporation, available at http://www.justice.gov/atr/cases/ms_index.htm Assignment Requirement: Minimum 1 Page Double Space, APA Format, 2-3 Credible Sources for ReferencesUse APA format to provide citations and references [http://owl.english.purdue.edu/owl/resource/560/01/].
Reading Required: Thomas, C.R., and Maurice, S.C., Managerial Economics, McGraw Hill (2008) Power Point Presentation available at: http://highered.mheducation.com/sites/0073402818/student_view0/chapter16/index.html Consumer Protection: Government v. Market Regulation (von Mises Institute). A discussion between Peter G. Klein and Robert P. Murphy available at: https://www.youtube.com/watch?v=GM2ZMhjyT0U The Social Function of Profits (Von Mises Institute) available at https://www.youtube.com/watch?v=WXuZfe9lTMk Beveridge, T. M. (2013). Chapter 7: Monopoly A Primer on Microeconomics. Business Expert Press, New York, NY. [see attached]
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