Let’s face it, in today’s world we are using computers more and more. The growth of accessibility to the Internet has given us a brand new definition to connectivity, thus exponentially widening the wealth of information at our fingertips. Those of us who are computer and Internet users have experienced this rapid growth, yet many users do not understand some the “trade-offs” that have been made to bring this level of user-friendly technology to desk-tops all over the world. It’s just so easy. Buy it, bring it home, plug it in, insert a disk, and your on the Internet.
From the users perspective this is an incredible leap in the right direction. However, from a business point of view we must be very cautious. Due to the numbers of business who are involved in the production of computers and the fact that Microsoft has been not only a corner stone in development, but a household name since the very beginning, creates a potentially hazardous business environment. This has been the topic for many heated debates.
The main question Microsoft has been confronted with is weather or not they have created a monopoly or merely experienced a large market share and a competitive advantage stemming from their dedication to provide more efficient systems. Historically, the United States has set a precedent to penalize companies who demonstrated monopolistic actions. In the Sherman and Clayton Anti-Trust Acts, the United States officially made monopolies against the law. However, companies like AT have endured these changes, thus tearing down their walls of domination, allowing room for competition, and ensuring economic growth across the board.
The reason why Microsoft is currently under investigation is a result of some of the following ideas and events:
- Users have extremely limited operating systems that are compatible with existing hardware and the only operating system included with the purchase of a new computer is Windows.
- Integration of the Microsoft Internet Explorer with the already powerful Microsoft Windows operating system is viewed as a monopoly using their already supreme power to seal off competition in yet another area where a market already exists. (and)
- Tactics Microsoft has used in the development of other applications such as web development and design (i.e. the creation of FrontPage) have created compatibility issues that require extensions that can only be provided by Microsoft.
These are all examples of how Microsoft has jockeyed for position in this new, competitive, and obviously undefined computer business arena, eliminating competition while claiming to be the ultimate saint.
To prove that Microsoft is indeed a monopolistic force in the operating systems market David Chun, a student at UCLA, conducted a survey asking several different Original Equipment Manufactures (OEMs) these very simple questions.
- Do you offer any other operating systems?
- Can I buy computers, any models, without buying Windows?
- Can I return Windows and get a refund?
After Mr. Chun contacted several of these OEMs, Sony, DELL, NEC, Gateway, and IBM (just to name a few), he found the following information:
- SONYNoNoWe are under contract with MicrosoftNo
- DELLNoNoWe are under contract with MicrosoftNo
- NECNoNo We do not have contracts with other O/S manufs.No
- with WindowsThat’s just the way it is.No
As you can see from the illustration, not one of these major OEMs offers its customers any options. It seems as though Microsoft has everyone’s hands tied and all bases fully covered concerning the O/S market. Due to the fact that Microsoft won’t even grant OEMs some sort of refund policy to offer “wayward” customers who aren’t interested in buying their O/S is just plain selfish, pushing other potential O/Ss deeper into the corner they are already trying to exist in. You have to begin to wonder what this giant is really all about.
Everyone knows that for a user to obtain access through the Internet they need a browser and an Internet Service Provider (ISP). A web browser is a software application that translates hypertext markup language (HTML), allowing us to “surf” the web. Recently Microsoft has decided to bundle their version of a browser, Microsoft Internet Explorer, with their operating system, Windows. Microsoft views this as merely adding an ice dispenser to its already existing refrigerator.
However, a company like Netscape who has been a leader in the market for years thinks much differently. Indeed, it may seem as simple as adding an ice dispenser (a simple upgrade), yet is there really an independent market that is going around trying to install ice dispensers? I say no. The browser market does in fact exist outside the realm of an operating system and Microsoft hinders these other competitors by using its influence in another market with a completely different product to gain a definite edge over all other competition.
In a case between Telex and International Business Machines, the court found, “…a monopoly may use practices that any company, regardless of size, could legally employ…”, however, “… they cannot…use market power in such a way as to prevent competition.” Whether Microsoft has actually committed this act is yet to be proven, but I personally think the ground for this argument could be established.
One thing is for sure. The computer industry is unlike any other in existence today. It remains the fastest changing industry in the world and has the government running in circle about how to create and enforce legislation on matter such as the Microsoft Anti-Trust issue. Until the government successfully defines how far a monopoly can develop itself and how it uses existing powers to leverage itself in other markets the computer industry will sadly remain a Wonderland where anything is possible if you’re the one with all the power.
- David Chun. “Required to Buy Microsoft Windows.” July 08, 1998. http://www.essential.org/antitrust/ms/jun3survey.html
- Bruce Holcomb. “Recent Decision.” The George Washington Law Review. May 1980.
- Dan Check. “The Case Against Microsoft.” http://www.compuserve.com/homepages/spazz.htm
- Stanley Sporkin. “Memorandum Opinion” http://research.bryant.edu/~mbougon/BU-400