Antitrust Claims- Microsoft Corporation Essays -

Antitrust Claims- Microsoft Corporation Stephen W. Pore BUS 670- Legal Environment Professor Blake Dahl November 3, 2012 In the technology industry certain laws are created to promoted fair competition within the marketplace. These laws are called antitrust laws which are created to avoid activities that influence hurt or unfairly harm consumers and other businesses within the designated industry. A well-known corporation that has faced turmoil of the antitrust laws is Microsoft Corporation. This paper will present some antitrust claims faced by the Microsoft Corporation, analyze the charges imposed against Microsoft and whether the charges were valid in Microsoft pursuit for future developing. In 1998, the United States Department of Justice and 20 states actually filed a set of civil actions against Microsoft alleging that Microsoft?s handling of its operating system sales and web browser sales abused the software giant?s monopoly power in the Intel-based personal computer market (Mallor, Barnes, & Langvardt, 2010). Federal District Court for the District of Columbia alleged that Microsoft harmed Netscape's browser business through anticompetitive practices related to the Windows operating system. Microsoft will further provide AOL with a new worldwide distribution channel for software to certain PC users, and provide technical cooperation and information "to ensure the best possible AOL member experience on current and future Microsoft operating systems"(Weil, 2003). According to the case In July 1994, officials at the Department of Justice ("DOJ"), on behalf of the United States, filed suit against Microsoft, charging the company with, among other things, unlawfully maintaining a monopoly in the operating system market through anticompetitive terms in its licensing and software developer agreements (U.S. Court of Appeals Opinion, 2001). In the fair trade competition, antitrust laws are legal rules to promote fair competition in the marketplace that can apply to both businesses and individuals. Even accepting the district court's findings, its conclusion that Microsoft violated the Sherman Act is unsustainable. The Sherman Antitrust Act of 1890, considered the most important of these acts, focuses on association actions in prohibiting contracts, combination or conspiracy in restraint of federal or foreign trade commerce. The second section mainly targets the actions of individual businesses in its prohibition of monopolization and attempted monopolization. Another Antitrust Act is called the Clayton. The Clayton Act of 1914 specifically discourses the competitive risks arising from price discrimination, binding arrangements, limited distributing, mergers, and connecting executives. Unlike the government case, however, which alleged that Microsoft used its market position to harm competition by incorporating new features into the operating systems at no additional cost, these private class-action lawsuits claim that Microsoft overcharged consumers. Microsoft has successfully obtained dismissals of a substantial number of these cases and has made a concerted effort to resolve these private class-action lawsuits through settlement where reasonably possible (Antitrust Settlement Fact Sheet, 2007). In conclusion software industries, where the consumer value of a particular product, such as a mobile or a personal computer, increases as the number of consumers using that product increases, firms have a tremendous incentive to compete to have their own product accepted as the industry standard. In the history of Microsoft Corporation it is a enlarge computer software manufacturer with one of the highest value worth in the world developed by Bill Gates and Paul Allen in 1978. Microsoft has produces the Windows family of operating systems for personal computers and servers. Identifying that those platforms had the potential to succeed allowed possibility to distributed so that other businesses have a tremendous incentive to compete to have their own product accepted as the industry standard. Reference Antitrust Settlement Fact Sheet. (2007, January 17). Retrieved from http://www.microsoft.com/presspass/legal/01-17-06AntitrustFS.mspx http://www.microsoft.com/presspass/legal/01-17-06AntitrustFS.mspx Mallor, J., Barnes, A.J., Bowers, L.T. and Langvardt, A.W. (2010). Business Law: The Ethical, Global, and E-Commerce Environment. 14th Edition. McGraw-Hill Companies, Inc. New York, N.Y. U.S. Court of Appeals Opinion, 00-5212 (United States Court of Appeals June 28, 2001). Retrieved November 05, 2012, from http://www.microsoft.com/presspass/legal/06-28opinion.mspx Weil, N. a. (2003, May 28). Tech events: AOL, Microsoft Settle Netscape Suit. Retrieved from PCWorld: http://www.pcworld.com/article/110930/article.html