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Microsoft Case - Essay Example

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Microsoft Corporation is a large computer software manufacture company that specializes in the production of the Microsoft operating systems that are bundled with computers that are marketed by any companies. In recent years, the company has been investigated for numerous…
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Microsoft Case
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Microsoft Case

Download file to see previous pages... The author states the second allegation as that Microsoft had various contractual agreements with computer manufacturers and Internet Service Providers that effectively allowed the company to retain a monopoly over the market. The third allegation is that the company attempted to monopolize the market for Internet browsers by including a default version of the Internet Explorer with their operating systems, and the last allegation being that the company bundled the said Internet browser with all its operating systems, an act that is illegal under the Sherman Antitrust Act (Economides, 2001).
After an analysis of the allegations listed above, it is completely agreeable that Microsoft Corporation was trying to gain a monopoly over the market, because the acts that it performs can be deduced to be too competitive. This conclusion is arrived at after considering the fact that the company introduces barriers of entry to the market by making sure that all their products (operating systems) are bundled with their own Internet Explorer. This fact will ensure that new software producers have steep barriers of entry into the browser software market. Another fact that concludes that Microsoft Corporation tried to monopolize the software market is that the company is the main competitor in the market for operating systems, so, having contractual agreements with Internet Service Providers effectively means that the company controls the market for Internet browsers.
However, monopoly market structures are not always bad, though they restrict the competitive effect of the market by increasing their market power and introducing barriers to entry. A Pure Monopoly has many characteristics, the main one being the lack of competition because the company operates alone in a market. In this case, the monopoly market structure is not bad because the pure monopolist controls the price structures in the market, ...Download file to see next pagesRead More
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