The Antitrust Case Against Microsoft Essay

2222 words - 9 pages

The Anti-Trust Case Against MicrosoftSince 1990, a battle has raged in United States courts between the United Statesgovernment and the Microsoft Corporation out of Redmond, Washington, headed by BillGates. What is at stake is money. The federal government maintains that Microsoft'smonopolistic practices are harmful to United States citizens, creating higher prices andpotentially downgrading software quality, and should therefore be stopped, whileMicrosoft and its supporters claim that they are not breaking any laws, and are just doinggood business.Microsoft's antitrust problems began for them in the early months of 1990(Check1), when the Federal Trade Commission began investigating them for possible violationsof the Sherman and Clayton Antitrust Acts,(Maldoom 1) which are designed to stop theformation of monopolies. The investigation continued on for the next three years withoutresolve, until Novell, maker of DR-DOS, a competitor of Microsoft's MS-DOS, filed acomplaint with the Competition Directorate of the European Commission in June of 1993.(Maldoom 1) Doing this stalled the investigations even more, until finally in August of1993, (Check 1)the Federal Trade Commission decided to hand the case over to theDepartment of Justice. The Department of Justice moved quickly, with Anne K.Bingaman, head of the Antitrust Division of the DOJ, leading the way.(Check 1) The casewas finally ended on July 15, 1994, with Microsoft signing a consent settlement.(Check 1)The settlement focused on Microsoft's selling practices with computermanufacturers. Up until now, Microsoft would sell MS-DOS and Microsoft's otheroperating systems to original equipment manufacturers (OEM's) at a 60% discount if thatOEM agreed to pay a royalty to Microsoft for every single computer that they sold(Check 2) regardless if it had a Microsoft operating system installed on it or not. After thesettlement, Microsoft would be forced to sell their operating systems according to thenumber of computers shipped with a Microsoft operating system installed, and not forcomputers that ran other operating systems. (Check 2)Another practice that the Justice Department accused Microsoft of was thatMicrosoft would specify a minimum number of minimum number of operating systemsthat the retailer had to buy, thus eliminating any chance for another operating systemvendor to get their system installed until the retailer had installed all of the Microsoftoperating systems that it had installed.(Maldoom 2)In addition to specifying a minimum number of operating systems that a vendorhad to buy, Microsoft also would sign contracts with the vendors for long periods of timesuch as two or three years. In order for a new operating system to gain popularity, itwould have to do so quickly, in order to show potential buyers that it was worthsomething. With Microsoft signing long term contracts, they eliminated the chance for anew operating system to gain the popularity needed, quickly.(Maldoom 2)Probably the second...

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