• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Microsoft Antitrust Case Microsoft is a large diversified computer software manufacturer. Microsoft produces the Windows family of operating systems

Extracts from this document...

Introduction

Microsoft Antitrust Case Microsoft is a large diversified computer software manufacturer. Microsoft produces the Windows family of operating systems for personal computers and servers. It also produces applications software that run on the Windows family of operating systems, most notably the very successful MS-Office Suite consisting of Word, Excel, PowerPoint, Outlook and Access. Almost all Microsoft products are complementary to a member of the Windows family of operating systems for personal computers and servers. During the last few years, the Federal Trade Commission and the Department of Justice of the United States have investigated Microsoft on various antitrust allegations. The 1991-1993 and 1993-1994 investigations by the Federal Trade Commission ended with no lawsuits. The 1994 investigation by the United States Department of Justice was terminated with a consent decree in 1995. The provisions of the 1995 consent decree were: 1. Microsoft agreed to end per-processor (zero marginal prices) contracts with computer manufacturers but it was allowed to use unrestricted quantity discounts. 2. Microsoft shall not enter into any License Agreement in which the terms of that agreement are expressly or implied conditioned upon the licensing of any other covered product, operating system software product or other product (provided, however, that this provision in and of itself shall not be construed to prohibit Microsoft from developing integrated products): or the original equipment manufacturers not licensing, purchasing, using or distributing and non-Microsoft product."1 This 1995 consent decree imposes two restrictions, one horizontal, and one vertical. The horizontal restriction stops Microsoft from using zero marginal cost pricing. However, it allows for quantity discounts, disregarding the fact that zero marginal cost pricing is a special case of a quantity discount contract. The vertical restriction of the decree prohibits product bundling created by contract, but allows Microsoft to keep expanding the number and type of functions of its products, including Windows. In this decree contractual bundling was not allowed, but technological bundling was allowed. ...read more.

Middle

The officials from these states communicated to Judge Posner that they would not sign such a deal. The judge was forced to declare the negotiations a failure. Given the proposals that the Government offered in the negotiations, there were expectations that the Department of Justice would demand more or less the same terms in the remedies phase. Instead, the Department of Justice asked for a much more radical step, the breakup of Microsoft. The judge adopted a remedy proposal that imposed the breakup of Microsoft into two "Baby Bills." There would be an operating systems company, which would inherit all the operating systems software, and an applications company with all the remaining software assets. The cash and security holds of other companies held by Microsoft would be split between the two entities. Bill Gates and other officers, shareholders of the company would not be allowed to hold executive and ownership positions in both of the companies. The District Court ruling also imposed interim conduct restrictions on Microsoft. The restrictions were to last three years, from the time of the breakup. The restrictions are as follows: 1. Microsoft would create a pricing schedule that would apply to all buyers so that price would not be conditioned on the sale of other Microsoft products. 2. Microsoft would not be allowed to have exclusive contracts that do not allow the other party to use, display, or feature it opponents' products. 3. APIs and other technical information of Windows should be shared with outsiders as it is shared within Microsoft. 4. Microsoft is not allowed to take actions against manufacturers who feature competitors' software. 5. Microsoft will allow OEMs to alter Windows in significant ways. 6. Microsoft is not allowed to design Windows to disable or compromise rivals' products. The above conditions were similar but more restrictive than the ones proposed by the government in the settlement talks at the end of March 2000. ...read more.

Conclusion

Is Microsoft good? Or is Microsoft bad? Well, the answer is a little bit of both. Even though the Justice Department found that Microsoft might be practicing some techniques that are less than ethical, they did not find that Microsoft was breaking any anti-trust laws, nor did Microsoft actually admit to the accusations when they signed the agreement. If anything, them signing the agreement was more of a sorry than a full-fledged admission of guilt. Other people might disagree with me, and there might be a lot of allegations floating around from different companies, but the fact of the matter is plain and simple. Microsoft has not been formerly charged and found guilty of an illegal practices pertaining to them being a monopoly. When considering whether a monopoly should persist or not the factors must be examined closely. Whether or not the consumers are being exploited is something that is essential when contemplating the breakup of a monopolistic firm. Often times, and in the case of Microsoft, the consumers benefit from the monopoly. After more than three years of litigation, repeated courtroom setbacks and failed settlement talks, Microsoft emerged largely successful from its long antitrust battle. Microsoft's agreement with the Justice Department does not require it to alter the design or development of its products and will not change Microsoft's strategy of aggressively moving into new markets. While Microsoft may be limiting its competition, it is aiding the consumer. For it is able to charge a lower price and produce more efficiently because of smaller costs that if it existed in a purely competitive industry. Microsoft is not the stereotypical monopoly, in that it continues to innovate, which explains the upgrades to its present software. It would not be right to break-up this firm, for its existence is beneficial to the public. Regulatory action may be needed though in order to provide competitors with more of a fighting chance. Competition still exists though and in the unpredictable industry of technology a firm can plummet and rise swiftly. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Machinery of Justice section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Machinery of Justice essays

  1. Balancing Competing Interests

    Criminal Law is concerned to balance the competing interests of society and the offender. Each offence carries with it a right not to be the victim of the offence. Criminal law imposes sanctions on those people who in effect fail in their duty and infringe their rights.

  2. The European Court of Justice ensures that European law is applied throughout the member ...

    leaving the member states to create their own detailed legislation in order to put those objectives into practice. As a result, it was originally assumed by most member states that directives could not have direct effect and would not create individual rights until they had been translated in domestic legislation.

  1. "If the Constitution is the source of governmental power, and the judiciary interprets the ...

    really were 'square' with the constitution then there would be little room for the Court to positively create and implement public policy. In Roberts' judicial landscape most cases would be settled quickly once and for all. Most would be so obvious that appeal to the highest court would not be necessary.

  2. I will look at different black theologies and different theories of justice, and attempt ...

    before freedom. One has to understand the ground of one's being, and abolish ignorance -the personal conquering of sin. One has to acknowledge and accept difference as a positive quality via a reversal of consciousness. This prevents black people alienating themselves from their true inner person, as if they try

  1. The Canadian Justice system towards aboriginal offenders

    Although this sentence is not binding, it does contextualize the offence and provide the trial judge with culturally relevant sentencing options.21 Once other parties to the conflict have responded to the statements of the offender, the sentencing circle as a whole conceives of a reparation that would be necessary for the offender to make amends.

  2. Describe with the aid of examples, the authorities, representative bodies or persons that exercise ...

    unless the Court or the official receiver order otherwise, be made out and submitted to the official receiver. It must be in the prescribed form so it will be accepted by the receiver, verified by affidavit and show; * "particulars of assets, debts and liabilities * names, residences and occupations

  1. George Bush – Analysis of a political speech.

    The topicality then shifts towards the casualties. The semantic field of large quantities exaggerates the number of victims for example in paragraph 15 where he uses the words dozens, hundreds and more than two hundred and fifty.

  2. Expert Testimony and Its Value In the Justice System

    If the party were to reject the expert then there would be a right of appeal available which would then see a judge or magistrates making the decision. The problem with this test is that it would still not be clear as to who exactly qualifies as an ?expert? as different people would have different subjective views.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work