A case against Microsoft was brought to court in 1998 that itconducted unlawful business which violated the antitrust laws.Microsoft was monopolizing the market for internet browsers which wasa violation of section 2 of the Sherman Act. It collaborated withOEM’s, internet service providers together with other operatingsystems to practice monopoly power in order to limit Netscape andother Rival Companies access to market. Microsoft sold its Windows 98without paying any consideration to other companies. Also it raisedits prices for Widows 95 to the same level as windows 98 which wasunethical (Page & Lopatka, 2013). This barrier to entry isevidenced by the IBM Company not being in a position to get widesupport for its operating system. Also it is seen by the apple’scompany inability to compete with windows.
From this unethical behaviour, the government together with ThomasJackson (judge) met to discuss on the Microsoft’s market dominance.The department for justice accused Microsoft for being a burden toconsumers through limiting their market competing power mostespecially interfering with Netscape browsers (Page & Lopatka,2013).
Before the court, Microsoft defends itself by claiming that theapproach to entry barrier was only demonstrating Microsoft popularitybut it was not a barrier to entry for rival companies and that it hadgained its power in operating system through innovative means whichhas facilitated its superior quality products (Page & Lopatka,2013). The court appealed that Microsoft had practiced applicationbarrier entry which impacted negatively on new entrant companiestogether with the current running rival companies in the operatingsystem market.
I support the outcome that Microsoft practiced Monopoly power atthe expense of Netscape browsers and other rivals because even afterthe government presents the case that damages the company reputationand embarrasses it, the court still concludes that Microsoft will useits power and huge profits to continue dominating and harming anyfirm that tries to compete with them. The company had also saidearlier that they were ready for a long fight and its ChairmanWilliam Gates made it clear that they have a strong case to appeal(Page & Lopatka, 2013).
Page, W. H., & Lopatka, J. E. (2013). The Microsoft case:Antitrust, high technology, and consumer welfare. Chicago:University of Chicago Press.