The Microsoft Case

In: Business and Management

Submitted By andaiulia
Words 513
Pages 3
The Microsoft Case

Microsoft was being investigated for antitrust behavior because the company was suspect of violating the Sherman Act and obtaining monopoly power in the PC market. By doing this accusation the court had established that Microsoft Windows system was used on over 80% of the PCs that were Intel-based. To have such a higher percentage the pure monopoly was created by controlling the entire market of the product. This situation had been occurred because the firm had the patent of the product and the exclusive license to sell it. Windows was created to be an individual system of operation, and by integrated it with internet explorer, it created high barriers of entry into the PC market, by blocking their competitors Netscape to become a platform that will compete with Windows. Microsoft was also accused of anticompetitive practices by limitation the use of other companies’ products in their system of operation that were on the market. The Court also took in consideration if Microsoft acted like a monopolist. Microsoft argued that its behavior proves that it didn't act like a monopolist, but the Appellate Court disagreed. "Tellingly, the District Court found that some aspects of Microsoft's behavior are hard to explain unless Windows is a monopoly product," the decision reads. "For example, the company set the price of Windows without considering rivals' prices, something a firm without a monopoly would be unable to do." The ruling cited more examples, but the end result is that the Appellate Court ruled that Microsoft does indeed own a monopoly. The District Court also found that Microsoft's "predatory conduct" was put in place to ensure that the company would attain monopolistic power in a second market—Web browsers. Also the company making the price for their products produced a monopoly pricing in the market and without competitors their economic…...