Monopolies
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Monopolies
Based on the definition of a monopoly, which is characterized by having only one seller in a specific market, having a differentiated product, and having an extremely difficult entry into the market, Microsoft is considered to be a monopoly in the personal computer operating systems market. Currently there are no products that consumers could substitute for the Intel-compatible PC operating systems that Microsoft sells and there are not any companies that could begin selling Intel-compatible PC operating systems in the near future for a price that would be competitive and give consumers a reasonable alternative to Microsofts products. Microsoft also pressured Intel to not produce any products that would compete with Microsoft. Since there is only one company that is controlling the licensing of all Intel-compatible PC operating systems, that company can potentially set the license price above that which would be charged in a more competitive market, and there is no incentive for them to lower their sales price. Customers do not have options and are forced to buy from Microsoft if they want to have an Intel-compatible PC. This makes Microsofts level of market power overwhelming.
The Sherman Act states that no person can “monopolize or attempt to monopolize, or combine or conspire with any other person to monopolize any part of the trade or commerce among the several States”
The United States government charged Microsoft with violating many of the antitrust laws on the books. Specifically, Microsoft was charged with monopolizing the computer operating system market; integrating the Internet Explorer web browser into the operating system in an attempt to eliminate competition from Netscape; and using its market power to form anticompetitive agreements with producers of related goods.
Microsoft can only be found guilty of monopolization in the computer operating systems market if it used its market dominance to charge a price that is greater than what the competitive price would be. However, it is difficult to find out the competitive price in this market since there isnt one to use as an example. Eliminating competition is another anticompetitive act that Microsoft was accused of. Microsoft has a long history of trying to pressure competing companies into giving up production and development of new products that would directly compete with any of Microsofts products. If this tactic failed then Microsoft simply bought out the rival company. This is seen as a major violation of the antitrust laws.
Microsofts typical pattern has been to build a product, sell it, then develop something better. The risk of another company developing something better before Microsoft does is where the problems begin. Microsoft does not like to compete and therefore tends to crush all of the viable competition. This is what happened to products like WordPerfect, Lotus 1-2-3 and a potential competitive operating system called Dr DOS. If Microsoft was unable to pressure the manufacturer of the competitive product into discontinuing it, then they simple took the product or bought out the company.
In November of 2002, the United States District