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The Microsoft Case - Essay Example

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There was a need for the antivirus investigation for antitrust behavior because Microsoft is a large diversified computer software producer with utmost valuations in the global market. Therefore, the investigation is necessary to avoid production of low quality products and in…
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The Microsoft Case

Download file to see previous pages... The company was involved with zero marginal price deals with computer producers that brought stiff competition in the market because other companies would not meet this zero marginal price. According to the Kiang (2010), the company was illegally leveraging its monopoly power in the operating systems market by giving its applications programmers with unfair lead time.
The company was involved a with license agreement in which conditions had minimum commitments that amounted to exclusive dealings by the monopolist. Moreover, the antirust behavior investigation was as a result of claims by Novell that the company was unlawfully trying DOS windows in the market. The Microsoft managed to hide some interfaces from third party applications software firms and it intentionally sent error messages to users of other software when users tried to use it in combination with Microsoft’s operating system. Finally, the investigation was carried because the company had bought Intuit Company that had a market share of 90 percent. However, the merger would take the market structure from being duopoly to a monopoly, but Microsoft Company abandoned plans from the merger several weeks after the suit was brought that led to investigation of antitrust behavior of the company in the market.
By tying to purchase the Intuit Company that had largest shares in the market, I agree the company was trying to adopt the monopoly power in the computer software industry. The company wanted to be a price taker in the market that could result into imperfect competition over other firms in the industry (Mukherje, 2010). Meanwhile, the company option of zero marginal price to its manufacturers show that it wanted to gain the monopoly market structure due to its marginal revenue that are greater than marginal cost. According to Hall and Lieberman (2005), the demand curve of the monopoly company slopes downward because the ...Download file to see next pagesRead More
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