Anti Trust And Monopoly Case Study

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Register to read the introduction… This in turn means that, unfettered by competition, Microsoft did not need to succeed on its merits; it could charge a price for Windows higher than if it had to respond to competition. The Case for Microsoft

Still, the possession of these attributes merely made Microsoft a monopoly - Microsoft would be in violation of antitrust law only if it misused that power, by engaging in an illegal form of "exclusionary conduct" to protect or extend that monopoly. This, in fact, was the burden of the accusation that started the case in the first place, an accusation involving what was once called "the browser wars" – pitting its Internet Explorer against Netscape's Navigator.

Microsoft effectively made its browser and the OS (as the company itself would assert) inseparable. This effectively created a massive distribution network - and seemed, indeed, a clear use of monopoly power to win the browser wars. In addition, Microsoft sought to make deals both with computer manufacturers and with online services like AOL to offer Internet Explorer with their products, sometimes exclusively, and it prevented manufacturers from deleting Microsoft's browser even when they also installed Netscape's. In short, it threw its weight
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In this particular industry, the aggression is virulent, featuring regular commands to "kill" and "choke" competitors. But, like they contended in court while countering the accusations of indulging in "exclusionary action", they did not actively prevent any user from installing any third-party software on their OS and using it in preference to their own. Additionally, they were also willing to compromise on their deal-making and the licensing practices.

Additionally, the technology industry is characterized by powerful increasing returns. These increasing returns make the kind of "perfect" competition that prevails in the market for, say, wheat, impossible in the market for browsers or office suites. Necessarily, each type of product will in the end be produced by only a few companies, perhaps only one. And of course, high-technology companies are themselves quite aware of increasing returns, and their strategies - above all the prices they charge when they are trying to establish themselves in a market - are very much affected by that

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