Microsoft As A Monopoly
...lucrative business would perhaps be enticing to upstart companies looking to gain a piece of the pie. There is one large roadblock that may stand in the way between success and failure, and this company is Microsoft, Inc.
The question of whether Microsoft is considered a monopoly would seem fairly obvious to most that understand the history of this technology beast. During the year 2006, Microsoft owned approximately 95% of the Operating System market share (i.e. Windows XP), and 83% of the Internet Browser market share (i.e. Internet Explorer) (Net Applications, 2007). Microsoft has participated in anti-competitive behaviors that have created barriers to entry in their primary marketplace leading to alleged violations of the Sherman Antitrust Act of 1890.
If the United States has laws and regulations against this type of behavior in business, why is Microsoft allowed to conduct business operations the way they do? The Rule of Reason is not as cut and dry as the Sherman Act, and therefore allows for increased “gray area” when making the determination if a company is performing as a monopoly. From May 18, 1998 through April 3, 2000, United States and Microsoft presented their cases for and against the fact that Microsoft was operating in a monopolistic manner. Judge Thomas Penfield Jackson ruled that Microsoft violated both sections of the Sherman Act, demonstrating that “it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition…” (Jackson, 1999. p.27).
MICROSOFT=MONOPOLY?
Structure-Conduct-Performance
To assist in diagnosis of whether Microsoft is a monopoly or not, I applied the Structure-Conduct-Performance model. This model analyzes: what proportion of the market Microsoft controls and whether or not this market share position will continue in the...
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