Microsoft Antitrust Case

There has been a lot of debate recently about Bill Gates within the software industry.  This debate has occurred because Windows is on the majority of personal desktops, which is considered a monopoly in the system.  The problem with having a monopoly is that any software that is written by any company must work with the Windows operating system.

That means that all companies must consult with Microsoft before making software.  It also means that Microsoft can effectively destroy a company by refusing to use their software.  Or, Microsoft can create their own products that compete with other companies, and they can include it with the Windows operating system for free.  Since free products that work well with the operating system (and which is conveniently already there) will be chosen over alternatives, Microsoft can severely harm their competitors with this strategy.

The lawsuits against Microsoft said that the company was using this power to destroy different companies and to boost their own products.

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In this country, monopolies are frowned upon.  While this is a capitalist society that allows free market competition, it is assumed that all companies should have an equal chance to participate in the market and to make profits.  This was especially true in the time of the anti-trust laws, when the Clinton administration was in office, an administration that was against big business as a rule.  The verdict handed down was decidedly harsh, calling Microsoft a “thug” in its business dealings with other companies.

These issues do exist in other countries as well.  In fact, some countries will not allow Microsoft to sell their products anymore because of the proprietary software and operating systems that they use.  Countries do not want products that take over the market entirely, they want competition from different products, like the U.S. does.

Many people felt that Microsoft was not being at all ethical in the way they were dealing with this issue.  In being freely competitive, companies should do the best they can to promote their products and win the favor of the consumers, but they should not go so far as to make it impossible for other companies to compete.

There are other business ethics, as well.  Microsoft should not be forcing their competitors, or those who support their business (the software companies) to write their products or conduct business in any particular way.  However, by writing an operating system that requires software to be produced in specific ways, they are basically forcing companies to do things their way, or to lose the business of almost everyone in America who owns a PC.  Since companies obviously do not want to go under, they are forced to play the game Microsoft’s way.

Another issue is that if Microsoft doesn’t like the product a company comes up with, they can force the product off the market by offering their own version of it, which comes bundled with their operating system.  For sheer convenience alone, Microsoft can win that battle every time.  This is unethical because Microsoft only has to decide that they don’t like a product, and they can simply make it disappear.

Legally, the U.S. government does not allow monopolies to appear in the business world, for precisely the above reasons.  It allows oligopolies (where a few major companies control the market share relatively equally), but monopolies make it too difficult for new businesses to break into the system.  Also, in Microsoft’s case, it was not only controlling its own section of the industry, but actually the entire industry.  The case’s judge considered this type of behavior “predatory.”

Microsoft is, of course, the primary player in this case.  It is using its power as the leader in the industry to try to remain the leader, and to control even more of the industry.  Meanwhile, most other software companies, including Novell, Netscape, and PC manufacturer Gateway, are against Microsoft.  They are trying to destroy Microsoft’s monopoly in order to create opportunity for themselves.  Of course, if they were in Microsoft’s position, they would do no differently.

All software companies are seeking to lead the industry and have a monopoly, because that is the primary way to make money.  Because these software companies cannot do this while Microsoft is in the way, they are calling for Microsoft’s destruction or separation into smaller companies so that they can have a shot at the big top.

The government is also trying to use its power to destroy Microsoft, despite the fact that the Clinton administration has approved more large mergers than any previous administration.  They are making an example of Microsoft because a lot of people are upset about it.  This occurred just before an election year, so they would be attempting to garner political power from this move (as we know, it did not work, and the Democrats lost the White House in 2000).

References

1. McLaughlin, Martin (1999).  “Behind the Microsoft antitrust case: computer giants battle for market and profits.”  World Socialist Website.  Accessed December 7, 2007.  Website: http://www.wsws.org/articles/1999/nov1999/micr-n11.shtml

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