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The Antitrust Case Against Microsoft Should Microsoft Prevail For Hard Work Or Fall?

2046 words - 9 pages

In the United States, monopoly policy has been built on the Sherman Antitrust Act of 1890. This prohibited contracts or conspiracies to restrain trade or, in the words of the later Clayton act, to monopolize commerce. The claim that a company should be broken up is clearly not a new concept in America. In the early 20th century this law was called upon to reduce the economic power wielded by so-called "robber barons," such as JP Morgan and John D. Rockefeller, who dominated much of American industry through huge trusts. These trusts were formed as a number of competing companies agreed to assign the whole of their stock to a group of trustees, receiving in exchange trust certificates ...view middle of the document...

The company is not used to competing and never really had to do much marketing in order to sustain their dominance. By looking at the AT&T and Microsoft antitrust lawsuits brought upon them by the federal government, one can see how there are differences in the cases, and how it is not clear as to whether Microsoft actually has a monopoly. It is also apparent that the government might be using Microsoft to institute new litigation pertaining to the up and coming companies in the information age. By using a high profile company, such as Microsoft, the government will have an easier time in getting their message across that they can regulate business. No matter the outcome, it does not appear that Microsoft has a clear-cut monopoly and it is not difficult to see why.The Supreme Court can play a major role in the day-to-day operations of businesses. This is evident in the cases that were brought up by the federal government against AT&T in the late seventies into the early eighties, and the recent changes brought up against Microsoft. In both these cases the federal government thought that the companies had a monopoly and wanted to break them up. The breaking up of companies is done to ensure that one company does not control a particular market.In both the AT&T and Microsoft cases, the two companies were charged with being a trust or cartel. A cartel is a combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members (www.dictionary.com). Today, there has been a shift to a high tech economy and the government has had to change anti-trust laws to keep up with its changes.In 1995, Microsoft agreed to a consent decree as a way of settling a government antitrust suit, and agreed to not engage in particular practices. The consent decree was designed to prevent Microsoft from using the licensing process to protect its operating systems monopoly, and there was evidence that Microsoft was beginning to do just that. This case is arguably the most serious antitrust case since the AT&T case, and will be a "litmus test of how corporate power will be reconciled with consumer rights in the information age." (Shapiro). People are saying that Microsoft is leveraging its market power by using strong-arm tactics and predatory practices to expand into all communications markets. Microsoft has the natural advantage of what Economists call "network effects", which leads certain companies with successful products to dominate the market as well as preventing competition from possibly superior products. (Shapiro)Microsoft is nowhere near as dominant as AT&T was and its dominance is threatened on five fronts. The first threat is from Sun's Java programming language, which, when operational, will allow programs to run on PC's as well as over the Internet with no problems. The second threat is that browsers have replaced parts of windows. Third, downloads from the Internet could turn...

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