MARKET POWER

Competition and Market Power

Competition and Market Power

Monopoly

By now everyone is familiar with the case U.S. vs. Microsoft. What is all this about? According to my two articles, Microsoft, the world's leading software company, is being sued by the Justice Department joined by 19 states.

As we all know, Microsoft dominates the personal computer's operating system. Almost every computer in schools, libraries, offices, and home is equipped with either Windows 3.X, Windows 95, or 98. As far as browsing the web, there are three major browsers: AOL, Netscape and Microsoft's Internet Explorer.

When Windows 98 came out, it already had Microsoft's Internet Explorer installed, compared to Netscape which users had to pay $50 for the program before being acquired by America Online.

Basically Microsoft is being sued for having an illegal monopoly over personal computer's operating system and repeatedly quashed competition to preserve its market domination. After the findings, Government lawyers said they would consider proposals to break up the company.

In Microsoft's defense, citing a 1990 ruling from the 4th circuit appeals court, Microsoft claims that "a desire to increase market share or even drive a competitor out of business through rigorous competition on the merits is not sufficient" to prove it intended to establish an illegal monopoly.

An important point in Microsoft's argument is the copyright law. According to Microsoft, it has a right to "prohibit unauthorized modification" of Windows and bar computer markers from removing icons or Internet Explorer.

Senate Democratic Leader Tom Daschle said in a statement, "Both consumers and the industry would benefit from a fair resolution of this case. The current mediation provides both parties a unique opportunity to resolve this dispute in a way that strikes a balance between the importance of our antitrust laws and innovation."

Monopolistic Competition

Since, monopolistically competitive fast food industry contains a large number of small outlets, ...