U.S vs. Microsoft

Essay by mpaoneUniversity, Bachelor'sA+, July 2005

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Microsoft's Anti-trust problems started early in 1990 when the FTC (federal trade commission) started investigating them for possible violations of the Sherman and Clayton Anti-Trust Acts which were designed to stop the formation of monopolies. A monopoly is a situation where a single seller or producer supplies a commodity or a service. Operating in an environment where there are no real substitutes for the product or service sold, the monopoly then controls the pricing. Another issue that Microsoft was accused of was tying. Tying is the practice in which a company would use their leverage in one market area to gain leverage in another market where thy have stiff competition. Microsoft would use their graphical user interface (Windows) to sell their operating system (DOS) by offering discounts to manufacturers who purchased both MS-DOS and Windows. Microsoft also threatened not to sell Windows to companies who didn't purchase DOS.

Netscape also filed a lawsuit against Microsoft accusing them of tying. Microsoft had started bundling their World Wide Web browser (Internet 3.0) into their operating system (Win 95). Netscape also said that in addition to bundling the browser, Microsoft was also offering Windows at a discount to original equipment manufacturers to feature the Internet Explorer on the desktops of the computers that they shipped. This eliminated any competition for space on the desktop by rival companies.

In the proposed settlement, 1st Microsoft may not threaten retaliation on operating equipment manufacturers that do not purchase DOS or other Microsoft operating systems or software. 2nd Replacement boot loaders are going to be less restrictive, 3rd party middleware will also be less restricted in size and appearance which will make it harder for Microsoft to force partners not to promote competitors products. 3rd When windows offers the choice of Microsoft or...