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Microsoft Antitrust Case Essay

2458 words - 10 pages

AbstractThis paper analyzes the law of United States vs. Microsoft Corporation (Microsoft), a landmark antitrust case. The United States Department of Justice (DOJ) and 20 States sued Microsoft alleging that it monopolized the market for operating systems of personal computers (PC) and took anticompetitive actions to illegally maintain its monopoly.DOJ further alleged that Microsoft attempted to monopolize the market for Internet browsers because such browsers would create competition for operating systems.Finally, DOJ alleged Microsoft's bundling of its Internet browser, Internet Explorer (IE), with Windows operating system (OS) and that it engaged in a number of other anticompetitive exclusionary arrangements with computer manufacturers, Internet service providers, and content providers attempting to thwart the distribution of Netscape's browser.BackgroundMicrosoft engages in the development, manufacture, licensing, and support of software products for various computing devices worldwide. Its Windows family of OS, 95, 98, 2000, XP, NT, dominates the PC market. Its suite of applications, Word, Excel, PowerPoint, Outlook, Access, that run on the Windows family of OS, are the de facto productivity software standard for today's consumers.However, during the last decade, the Federal Trade Commission (FTC) and the DOJ have investigated Microsoft on various antitrust allegations. The 1991-1993 and 1993-1994 investigations by the FTC ended with no lawsuits. The 1994 investigation by the DOJ ended with a consent decree in 1995. With the key provisions of the 1995 consent decree being:1.Microsoft agreed to end "per-processor" contracts with computer manufacturers known as Original Equipment Manufacturer (OEM).2.Microsoft cannot enter into a license agreement where the terms of the agreement are conditioned upon the licensing of another Microsoft Product, or upon the OEM not licensing a non Microsoft product.On October 20, 1997, the DOJ filed a Petition for an Order to show Cause in the United States District Court for the District of Columbia. The DOJ contended that Microsoft has violated the consent decree that was entered between DOJ and Microsoft. The DOJ asked the Court to impose a $1 Million a day fine if violation continues and asked the court:1.To stop Microsoft from requiring PC manufacturers to accept Internet Explorer as a condition of receiving Windows 95.2.To require Microsoft to notify consumers of PCs that have Windows 95 that they are not required to use IE and are free to use any compatible Internet browser, and to give consumers simple instructions about how to remove the Internet Explorer icon from their PC desktop if they choose.3.To strike down broad portions of non-disclosure agreements that Microsoft requires those with whom it does business to sign.The AllegationsOn May 18, 1998, the DOJ, and the Attorney General of 20 States and the District of Columbia sued Microsoft. The main allegations were:1.Microsoft illegally monopolized...

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