When one company has monopoly in the market there are high chances of antitrust claims from equivalent competitors in the industry. With monopolistic behaviors, customers continue to buy products from the company despite the high prices. Sellers in such a case exploit the monopoly to increase their profits and market share.
In the business world, competition is permitted only when the agenda is to bring success to the business as well as when it grants the competitor an advantage (Mallor, Barnes, Bowers, & Langvardt, 2010, p. 214). Microsoft Company has a record of anti- competitive practices (Economides, 2001, p. 11).
This paper gives my opinions as well as facts about the antitrust claims filed against Microsoft by Netscape Communication in 2002 on behalf of AOL. I argue that the claims were valid and not a mere competition strategy for success as some may think.
The case filed against Microsoft by Netscape Communication for AOL, an online internet division in America, claimed that Microsoft had inflicted significant harm on Netscape Communications Corporation. The anti- competitive practices of Microsoft had affected competition in web browser’s market. This made the U.S’s District Court intervene so that Microsoft would compensate for the injuries and therefore enhance competition in operating system’s market (Economides, 2001, p. 4-7).
From the antitrust claims faced by Microsoft, I think that Microsoft had used anti-competitive practices in order to control browser’s market. The bundling of web browser software (Internet Explorer) with the operating system, (Microsoft windows) shows that Microsoft was exploiting its monopolistic power in order to control the sale of operating system and the web browser. Microsoft is alleged to bundle them together so as to benefit itself in the browsers market.
By so doing, every user of Windows would also have Internet Explorer copied to the Windows. This was seen from the U.S Court judges’ rulings that this practice would severely affect the market hence adversely hurting competing web browsers – Netscape Communicator.
More so, when Microsoft accepted to collaborate with AOL, the aim was to widen its market share, hence validity of the antitrust claim. Analysis of the case shows that Microsoft aimed at penetrating AOL’s market segment by accepting to jointly operate with AOL. This is for the fact that AOL has over 32 million subscribers allover the world. The collaboration would therefore form a platform for Microsoft’s access into the audiences.
Apart from the payments for antitrust claims that AOL received from Microsoft, It also received a nonexclusive license over the windows media software from Microsoft (Economides, 2001, p. 4-6). This also meant collaboration in software distribution as well as in digital media between the two giants in the industry.
Microsoft conducted anti- competitive practice to extend its monopoly in software. Although Microsoft claimed that Internet Explorer and Microsoft Windows were inextricably linked, the two browsers were separate products and did not have to function together. Other versions of Internet Explorer would alternatively be found- Mac OS.
In other words, Microsoft was attempting to kill off market for web browser. More so, the marketing and development of the Windows would come from profits of other unrelated sectors hence creating unfair competition and abuse of monopolistic powers (Mallor, Barnes, Bowers, & Langvardt, 2010, p. 214- 216).
Through such anti- competitive practice, Microsoft would make a lot of money at the expense of its competitors in the market. Anti- competitive practices mostly occur when a company has a significant market power, (Mallor, Barnes, Bowers, & Langvardt, 2010, p. 214) like Microsoft has.
From this case it is clear that companies were beginning to enjoy large audiences through other software applications like search engine and bookmarks in Internet Explorer (Mallor, Barnes, Bowers, & Langvardt, 2010, p. 214).More so, the interoperability in instant messaging can be critiqued as mere discussions instead of a road map in technology.
American companies must work at avoiding monopolistic practices as it has been seen in the recent past. This is because a healthy competition in the market works for the good of consumers. Anti –competitive practices benefits particular companies as well as negatively affecting the overall economy (Economides, 2001, p. 13-14). The intervention of U.S government was meant to end the ‘unfair’ advantage of free market through coercion.
Economides, N. (2001). The Microsoft antitrust case. Retrieved September 2, 2010 from http://www.stern.nyu.edu/networks/Microsoft_Antitrust.final.pdf
Mallor, J.P., Barnes, A.J., Bowers, T., & Langvardt, A.W. (2010). Business Law: The ethical, global, and ecommerce environment (14th Ed.). New York: Irwin/McGraw Hill http://www.amazon.com/Business-Law-Ethical-E-Commerce-Environment/dp/0073377643#reader_0073377643