Microsoft a Monopoly

Microsoft a Monopoly

Introduction

As Microsoft is working in the IT industry, the products of the companies are very much same and the competition is very much high in this industry. As the competition is very much high, it is very difficult for new comers to enter into the industry; unless or until the company is coming up with something different that cannot be produces by any other firm. Microsoft is the market leader in this firm, its products are somehow different to other companies in this firm, and the best example is of Microsoft windows, on which the whole system is depending.

Microsoft's primary input is large amount of Capital with which it produces technological instruments through efficient labor on a very large scale. Microsoft has captured the technology industry all over the world with a variety of large Computing products. When production volume increases it is accompanied by proportionally lower costs of production, which decreases the cost (Richard & Michael, 2002).

Antitrust Laws

Antitrust laws are currently at the center of a heated legal battle between Microsoft Corp., a Redmond, Wash.-based computer software maker, and the Justice Department. Microsoft is one of the world's most powerful corporations. In the 1996-97 fiscal years, it reported profits of $3.5 billion, up 57% from the previous year, and sales of $11.4 billion, up 31%. In March 1997, its stock was valued at $119 billion, ranking it among the top five companies in the world in terms of market value. Microsoft's market value has risen even higher since then, due to a surging overall stock market. The other companies in the top five, including General Electric Co. and Exxon Corp., have much higher sales than Microsoft, yet Microsoft ranks among them because it is so highly regarded by investors.

The Justice Department charges Microsoft with violating the decree by requiring computer makers that use its Windows software to include its Internet Explorer browser each time they install Windows 95 on a computer. A browser enables users to navigate through the pages of the Internet's World Wide Web. The decree specifically bars the company from "tying" any new products to Windows. The Justice Department views Microsoft's requirement that PC makers include its browser as just such an illegal "tying" (Richard & Michael, 2002).

Microsoft Defenders Fight Back

William Gates, the founder and chairman of Microsoft, and his defenders claim that the Justice Department's action is tantamount to siding with ...