[...] In the 1980’s Microsoft required its OEM’s (original equipment manufacturers) to pay a ‘per processor license fee’ for the computers that they shipped and this discouraged those OEM’s such as HP and Dell to install any other operating systems. In 1994 an antitrust suit was filed against Microsoft as the arrangement method that they followed seemed to be anticompetitive. Although Microsoft agreed to not use the ‘per processor license fee’, they had already gained a large advantage over their competitors. In the 1990’s as IBM was an OEM and also made operating systems and other application software’s they were considered by Microsoft to be a competitor and a possible threat. Thus Microsoft, in a discriminatory fashion, charged IBM higher license prices for its operating systems and withheld technical support from them. IBM later filed a suit against Microsoft and they settled the claim, but Microsoft had again, already gained the upper hand [...]
Table of Contents
- Introduction
- Monopoly Theory
- Microsoft's Monopoly Position
- Barriers to Entry
- Antitrust Issues
- Impact on Innovation
- Conclusion
Objectives and Key Themes
This text examines the extent to which Microsoft's monopoly position is in the public interest. It analyzes Microsoft's monopolistic practices and their impact on competition, innovation, and consumer choice. It delves into the theoretical framework of monopolies, including barriers to entry, antitrust issues, and the potential benefits and drawbacks of monopolies.
- Monopoly theory and its application to Microsoft's market dominance
- The impact of Microsoft's monopolistic practices on competition and innovation
- The role of barriers to entry in maintaining Microsoft's market position
- The economic and social consequences of Microsoft's monopoly
- The potential benefits and drawbacks of monopolies in the public interest
Chapter Summaries
- Introduction: This chapter introduces the concept of monopolies and explores the characteristics of a monopolist, including its ability to set prices and restrict output. It also highlights the potential for monopolies to generate excess profits.
- Monopoly Theory: This chapter delves deeper into the theoretical framework of monopolies, discussing various factors that contribute to their existence and the implications for economic efficiency and consumer welfare.
- Microsoft's Monopoly Position: This chapter focuses on Microsoft's dominance in the operating system market and examines the specific strategies the company has employed to establish and maintain its monopoly.
- Barriers to Entry: This chapter explores the various barriers to entry that have hindered competition in the operating system market, including high initial costs, network effects, and Microsoft's strategic maneuvers to prevent rivals from gaining a foothold.
- Antitrust Issues: This chapter discusses the antitrust scrutiny that Microsoft has faced over the years, highlighting various alleged anticompetitive practices, such as tying software products, predatory pricing, and hindering the development of competing technologies.
- Impact on Innovation: This chapter analyzes the potential impact of Microsoft's monopoly on innovation, arguing that while Microsoft has made significant contributions to the technological landscape, its dominant position may have stifled innovation in certain areas.
Keywords
This document focuses on key terms like monopoly, antitrust, barriers to entry, innovation, consumer choice, Microsoft, operating systems, and public interest. It explores the complexities of monopolistic practices and their impact on the technology industry and broader economic landscape.
- Quote paper
- Amir Colombus (Author), 2012, Is Microsoft's Monopoly Position in the Public Interest?, Munich, GRIN Verlag, https://www.grin.com/document/185073
