The Microsoft Antitrust Case - 11234 Words

The Microsoft Antitrust Case A Case Study For MBA Students by Nicholas Economides* Revised April 2003 Abstract This case study discusses briefly the economic and legal issues pertaining to the antitrust case of the United States and a number of States against Microsoft. * Stern School of Business, New York University, New York, NY 10012, (212) 9980864, fax (212) 995-4218, http://www.stern.nyu.edu/networks/, neconomi@stern.nyu.edu Copyright  ©, N. Economides 2 Contents 1. 2. 3. 4. 5. 6. 7. Facts ............................................................................................................................. 3 Antitrust Law On Monopolization And Attempting To Monopolize .......................... 7 Economics Of†¦show more content†¦The 1991-1993 and 1993-1994 investigations by the Federal Trade Commission (â€Å"FTC†) ended with no lawsuits. The 1994 investigation 2 by the United States Department of Justice (â€Å"DOJ†) was terminated with a consent decree in 1995. 3 The key provisions of the 1995 consent decree were: 1. Microsoft agreed to end â€Å"per-processor† (zero marginal price) contracts with computer manufacturers (Original Equipment Manufacturers, â€Å"OEMs†) but it was allowed to use unrestricted quantity discounts. 2. â€Å"Microsoft shall not enter into any License Agreement in which the terms of that agreement are expressly or impliedly conditioned upon the licensing of any other Covered Product, Operating System Software product or other product (provided, 1 Microsoft produces software, including operating systems for PC (Windows 95, 98, NT, 2000), operating systems for local network and Internet servers (Windows NT, 2000), â€Å"back-office† products for network and Internet servers, Internet clients, Internet and network servers, desktop applications (Office, Word, Excel, Access, Outlook, PowerPoint, MS-Money, etc.), games, and programming languages (Visual Basic, Java). Microsoft also produces services, including Internet service (MSN, WebTV), Internet content (MSN), and product support, and some hardware such as branded mice, keyboards, etc. USDOJ sued Microsoft on July 15, 1994, under Section 2 of the ShermanShow MoreRelatedMicrosoft Antitrust Case1007 Words   |  5 PagesProfessor: Dr. Chemene Crawford Date due: 06/03/2006 The Anti-Trust Case against Microsoft Microsoft was founded in 1975 by founder Bill Gates, a former Harvard drop out (Lawrence, 455). The business grew and controlled 90% of the market for operating systems, with revenues of over nineteen billion dollars per year (Lawrence, 455). In the nineteen nineties, the Internet generation was starting to explode and Microsoft new that it would be a profitable market. This led to their approachRead MoreThe Microsoft Antitrust Case Essay1365 Words   |  6 PagesThe Microsoft Antitrust Case The Microsoft Antitrust Case In 1998 the Microsoft Corporation was at the center of an investigation by the U.S. Department of Justice (DOJ) which alleged the company of violating the Sherman Act. The Sherman Act is considered the foundation of federal antitrust litigation, and is used to â€Å"combat anticompetitive practices, reduce market domination by individual corporations, and preserve unfettered competition as the rule of trade† (www.law.cornell.edu). The DOJRead More The Microsoft Antitrust Case Essay1115 Words   |  5 Pages The case against Microsoft was brought buy the U.S. Department of Justice, as well as several state Attorneys General. Microsoft is accused of using and maintaining monopoly power to gain an unfair advantage in the market. 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The company was determined to be a monopolyRead MoreUnited States V Microsoft: a Case for Antitrust Ethics Courses1182 Words   |  5 PagesUnited States v Microsoft: a Case for Antitrust Ethics Courses Eva Marie Cole BUS 670 Prof. Troy Tureau October 17, 2011 United States v Microsoft: a Case for Antitrust Ethics Courses In 1994, Microsoft Corporation was sued by the Department of Justice on behalf of the United States for violating  §2 of the Sherman Act â€Å"†¦by engaging in monopolization through a series of exclusionary and anticompetitive acts designed to maintain its monopoly power† (Mallor, Barnes, Bowers, amp; Langvardt,Read More The Microsoft Anti-Trust Case: Presidential Candidate Recommendations1545 Words   |  7 PagesThe Microsoft Anti-Trust Case: Presidential Candidate Recommendations The Microsoft Antitrust Case is essentially the clash of two separate ideals, the key issue being how much influence the government should have in the marketplace. According to the U.S. Justice Department, Microsoft is in violation of the Sherman Antitrust Act of 1890, which states: â€Å"Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolizeRead MoreCompetition Is The Cornerstone Of Capitalism1499 Words   |  6 PagesPresident Theodore Roosevelt to launch his famous trust busting campaigns. The era of antitrust legislation comes from the Sherman Act of 1890. The Antitrust laws were based on the constitutional power of Congress to control and limit American business. The Sherman Act makes monopolization illegal. One of the most famously known companies to fall victim to Antitrust laws in modern history was Standard Oil in 1911. This case set precedents for future conglomerates by acknowledging their monopolistic tacticsRead MoreEssay on Microsoft vs. The Government: A Mandate for Compromise1586 Words   |  7 PagesMicrosoft vs. The Government Although somewhat ironic, by now it is not surprising when the pioneer of an enormous industry becomes the focus of controversy. Such is the case for Microsoft Corp., which is currently undergoing many accusations of breaking antitrust laws. Some would argue that the corporation is making deliberate efforts to monopolize the software industry, while those naturally in favor of big business would encourage Microsoft’s â€Å"survival of the fittest† businessRead MoreBill Gates and Microsoft1662 Words   |  7 PagesBill Gates and Microsoft â€Å"Microsoft was founded based on my vision of a personal computer on every desk and in every home, all running Microsoft software,† Bill Gates once remarked (Stevenson). Everyone has their own dream but this was Bill Gates dream when he first co-founded Microsoft. This dream came to haunt him 12 years later when he was caught. Microsoft was charged with using its power to eliminate its competitor in the Web-browser market in the mid-90s (Stevenson). Bill Gates’ dreamsRead MoreMicrosoft: An Examination of Monopolies1023 Words   |  4 Pagesï » ¿Microsoft: An Examination of Monopolies Introduction This paper examines the nature of monopolies and the anti-trust policies developed by the government to discourage them. It specifically considers Microsoft and the case brought against it by the Federal government to prevent its becoming a software monopoly. In many cases, the government is justified in pursuing such anti-monopoly policies to protect competition and by extension the consumer. There are some instances, however, when allowing