Microsoft Monopoly
Why was Microsoft investigated for antitrust behavior?
In the eyes of some legal analysts, Microsoft was investigated and taken to court over antitrust allegations because of the belief that it would not live up to its own word about what it intended (McKenzie and Shughart, 1998). There was little doubt about the fact that by the mid- to late-1990s Microsoft had virtual control over the operating system (Windows) that it had created to operate the vast majority of personal computers, and that it was trying to control how it packaged its favored Internet access portal (Internet Explorer, IE). Even Microsoft knew that it had a privileged position. That was why it agreed in 1995 to a consent agreement that had two basic provisions. One being that Microsoft would not require that buyers of its Windows operating system to separately purchase and install other stand-along components (which presumably meant independent versions of Internet access programs like IE). Under a second condition, however, the company could still sell "integrated" (or bundled) components that, in this case, would make Windows and IE two parts of a single package. To the Justice Department at that time, selling an integrated package was acceptable; exercising virtual access through other methods like requiring independent purchases, on the other hand, would result in a form of "imperfect competition" and allow Microsoft to be a "price maker" and market controller -- or basically a monopoly demanding antitrust enforcement.
The debate since that time has centered on whether Microsoft live up to its word. According to many experts, Microsoft did not; in fact, it went out of its way to find methods of getting around the issue to its own advantage. As McKenzie and Shughard (1998) set up the dispute at the time:
But the question remained: Was Microsoft trying to gain monopolistic power?
The answer appears to be found in the end results of the legal actions. Microsoft was found guilty of monopolistic tendencies by the U.S. courts (McKenzie and Shughart, 1998), and later it would submit to stopping some of the very same practices in Europe, primarily so it would no longer…
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