ECON 312 Week 3 Anti trust behavior Cas
Anti-trust behavior Case Study
ECON-312
I reflect the case of Microsoft, which was investigated for antitrust behavior. Microsoft is a largest software manufacturing company having one of the highest assessments in the world. It manufactures windows required for an operating system of servers and personal computers. Since 1991 the Microsoft has been examined many times for the violation of antitrust laws particularly for Sharman Antitrust Act. The litigant alleged that the Microsoft distorted its monopoly power on personal computer based on Intel while handling sales of its operating system and web browser. The subject of content was whether Microsoft should be allowed to bundle its internet explorer web browser with its operating system. It was assumed that it is the bundling of this web browser with its operating system which allowed Microsoft to get victory in the browser wars as copy of internet explorer was available with every window user. Also the problem was whether Microsoft influenced or altered the programming of its applications to give approval to Internet Explorer over web browser of any other third party and restricting options available to consumers in the market
. These facts suggests that Microsoft was trying to gain computer software industry since bundling of internet explorer web browser with its operating system might have provided a monopoly power to Microsoft over these product.
Costs associated with Anti-trust behavior Businesses having market power can regulate the market on their own terms. They will have choice to charge any price from the customers. Therefore, they would often charge higher prices from the consumers and produce less as compare to the competitive outcome, causing in net welfare loss for the society. Further, due to lack of competition, firm’s incentive to contribute in innovations or cost reducing technology will get eroded; thereby productivity growth will get disadvantaged.
ECON-312
I reflect the case of Microsoft, which was investigated for antitrust behavior. Microsoft is a largest software manufacturing company having one of the highest assessments in the world. It manufactures windows required for an operating system of servers and personal computers. Since 1991 the Microsoft has been examined many times for the violation of antitrust laws particularly for Sharman Antitrust Act. The litigant alleged that the Microsoft distorted its monopoly power on personal computer based on Intel while handling sales of its operating system and web browser. The subject of content was whether Microsoft should be allowed to bundle its internet explorer web browser with its operating system. It was assumed that it is the bundling of this web browser with its operating system which allowed Microsoft to get victory in the browser wars as copy of internet explorer was available with every window user. Also the problem was whether Microsoft influenced or altered the programming of its applications to give approval to Internet Explorer over web browser of any other third party and restricting options available to consumers in the market
. These facts suggests that Microsoft was trying to gain computer software industry since bundling of internet explorer web browser with its operating system might have provided a monopoly power to Microsoft over these product.
Costs associated with Anti-trust behavior Businesses having market power can regulate the market on their own terms. They will have choice to charge any price from the customers. Therefore, they would often charge higher prices from the consumers and produce less as compare to the competitive outcome, causing in net welfare loss for the society. Further, due to lack of competition, firm’s incentive to contribute in innovations or cost reducing technology will get eroded; thereby productivity growth will get disadvantaged.
References: Mankiw, G N (2006) , Principles of Microeconomics, 4th edition, Cengage Learning. Snyder, C and Nicholson W (2008), Microeconomic Theory: Basic Principles and extensions, 10th edition, Cengage Learning. http://www.stern.nyu.edu/networks/homeworks/Microsoft_Case.pdf http://www.blurtit.com/q458553.html