The anti-trust case against Microsoft is among the majorly discussed case studies related to Microsoft organization. Fundamentally, the Microsoft Company was being investigated for the antitrust behaviour, after the emergence of various reports that it was abusing its position as a leading provider of the Operating Systems to computers. As an antitrust behaviour case that involved Microsoft Company, the case is important, based on the fact it is tremendously related to the Corporate Social Responsibilities (CSR) in organizations. Ideally, organizations should be the emulated voluntary commitment to incorporate practices economic, social and environmental criteria actions, which are all above and beyond the requirements of the stakeholders. In the case, it was alleged that Microsoft distorted its monopoly power on personal computer based on the Intel while handling sales operating systems and the web browser. According to the litigant, the bundling of the Internet browser by the Microsoft Company allowed it emerge the giant in the browser wars. This is because the company ensured that a copy of internet explorer was available in every window user. It was being questioned on whether the company carried out great alteration of the programming of its diverse applications to provide approval for Internet Explorer over the web explorer of any other third party, thereby inducing restrictions on options available to consumers in the global market. If these allegations were true, the facts would suggest that Microsoft Company was abusing its CSR, through gaining a considerable share of the computer market industry since bundling of an Internet Explorer web browser with its operating systems has enabled it to gain a monopoly power over other products.
The primary argument, in this case, was that Microsoft had attempted to utilize its dominance in the market for the PC operating systems. The objective of this was to leverage the competitive success of its Web browsers, the Internet Explorer. While it is evident that the implementation of this bundling strategy was expensive as the company lost revenue and goodwill, its founder Bill Gates and other company executives were still determined to implement the move because they knew that it would have long-term benefit for the companys dominance and ultimate success.
Notably, the case was plagued with various problems that included questions on whether the charges should be brought against Microsoft in the first place. The argument offered the proposition that Microsoft was to be considered monopoly, it was known to be a significantly non-coercive monopoly. Ideally, customers chose to run the Microsoft Windows on their personal computers. Other alternatives being available such as the UNIX, Linux, and the Macintosh majority of the consumers demonstrated considerable preferences for the convenience brought about the Microsofts Windows product. While the windows could not have been a superior product in the global market or industry, it could quickly run in other computer brands such as Toshiba laptop or on a Chinese clone. Fundamentally, the simplicity of Microsofts Windows installation allowed many consumers to use them.
Observably, the government case further accused the company of making it difficult for the users to install the software on the computers, which was operated by the Windows. Legally, if the company was found to have imposed some difficulties to the consumers about the uninstallation of the Internet Explorer and utilize other browsers, the companys practices would be deemed anti-competitive. Ideally, the case continually meandered along with other accusations of statements which were misleading and various sorts of the courtroom distractions.
It is believed that the rise and the success of Netscape Corporation attributed to the actions of the Microsoft Corporation about the alleged antitrust behavior. Notably, the company developed its first program known as the Navigator, which became a fully functional software that enabled PC users to access and view the content on the World Wide Web. Due to its effectiveness and efficiency in the PC, it widely spread and within one year, more than 40 million copies of the Navigator had been downloaded. This success was significantly viewed by Microsoft as a serious challenge and posed a huge threat to the existence and dominance of the company. To protect its monopoly and dominance in the market, Microsoft used its monopoly power in operating systems to manage and protect its application barrier to entry.
Critiques of this move agree that Microsoft did this by utilizing its dominance in the market for PC operating systems gain competitive advantages and success of its browser products, at the expense of the Navigator. Summed together, the three actions as perpetrated by the Microsoft, according to the government, were the violation of the Sherman Antitrust Act, which was the law under which the case was brought. Observably, the Sherman Act emerged as the earliest and the most significant of the United States antitrust laws and regulations. As its crucial elements, the sections one and two of the Sherman Acts prohibited the monopolies, combinations of services or any other behavior to restrain the commerce. Therefore, its primary goals were to promote open and fair competition among different companies, thereby being able to protect the consumers.
As a monopoly, Microsoft was able to enjoy its powers in the relevant market. In the case, the litigant argued that Gates and his executives were able to supply the operating systems to more than 95 percent of the compatible PCs across the world. This market share emerged healthy, big and persistently increasing. In this way, the company was able to carry out the alteration of prices of its products in the direction it deemed suitable for it, without the fear of reducing the demands on other products. This was followed by the attempt of the Microsoft divide the market for the web-browser software with the Netscape in 1995. In the case where the competitor, Netscape restricted the navigator to Macintosh, UNIX, and the earlier versions of the Windows operating systems, Gates and his company would provide Netscape with access to some technical information and the status as a preferred vendor. On observing the threat to its self-interest refused the offer, based on the fact that it felt that it needed to develop another version of Windows 95.
Linkage of the case to the Corporate Social Responsibility and business ethics
Notably, the Microsoft Company was investigated for the antitrust behavior, after the emergence of various reports that it was abusing its position as a leading provider of the Operating Systems to computers. As an antitrust action case that involved Microsoft Company, the case is important, based on the fact it is tremendously related to the topic of business ethics, particularly the Corporate Social Responsibilities (CSR). On a wider note, it was felt that Microsoft distorted its monopoly power on personal computer based on the Intel while handling sales operating systems and the web browser. In this sense, bundling of the Internet browser by the Microsoft Company allowed it emerge the giant in the browser wars through a copy of internet explorer was available in every window user.
Speaking of the antitrust refers to the laws and regulations that tremendously address and prohibit the business conduct and transactions; depriving the consumers of the benefits of the competition. Ideally, this behaviour integrates the formation of both the domestic and international cartels through which the competitors join the fixed prices or the divided market by the dominant party in the market. In the most occasion, the antitrust laws address the behaviors of companies that either stimulates monopolization of the market or maintains a monopoly through techniques that deny other firms the opportunities to compete and enjoy the market share. Nevertheless, the laws play crucial roles in addressing various issues such as the mergers, joint ventures and the manner in which products are distributed between those that are anti-competitive and those that operate with the aim of promoting the efficiency and innovation.
As indicated in the case, Microsoft is the largest software manufacturing company that has one of its assessments across the world. Ideally, the company manufactures windows for operating systems of the servers of the personal computers. The case offers a broad representation of various ethical issues found within the business environment, and which tremendously attracts the interests of the government. In reality, provision of products and services to consumers in a particular market or industry should be an obligation of every organization wishing to expand and enjoy the profits within that market. It is a crucial component of the Corporate Social Responsibility (CSR), which plays integral roles in the development of the business or organization (Braithwaite & Drahos, 2000). Both the local and multinational organizations should be ready to emulate voluntary commitment to incorporate practices economic, social and environmental criteria actions, which are all above and beyond the requirements of the stakeholders. In the case study, the allegation that Microsoft distorted its monopoly power on personal computer based on the Intel while handling sales operating systems and the web browser would emerge as the violation of the antitrust law imposed by the government if found to be true.
Even when the trial began in on October 1998 with the government of the United States accusing the Microsoft and Gates of the illegal bullying coercion, and the predatory pricing to undermine the Netscape, Gates denied being concerned about the rivals increasing browser market. As the violation of the U.S. antitrust law, the inclusion of the Internet Explorer Browser into the Windows operating systems made it difficult for the consumers to uninstall the browser and put a new one. In this way, it is important to recognize that the businesses possessing massive power can regulate the market on their terms. They will have the choice to set any price for the customer and may be charging higher prices for the consumers. In this way, they would produce less as compared to the competitive outcome, leading to the in net loss for the society. Lack of appropriate incentives may also make firms to tremendously contribute to innovations or costs reducing technology (Rosati, 2011). In this way, the productivity growth will be subjected to a serious jeopardy, in the cases of monopoly.
It is worth to understand that Microsoft Company allegedly failed to conform to the antitrust laws and regulations as a set and designed by the government of the United States. While it is evident that a better part of its activities, actions and behavior were depicted as the violation of the corporations social responsibility, monopoly is not always bad, especially if practiced from the point of efficiency. An attempt to illegally divide the browser market with rival Netscape and venturing into contracts with Internet service providers or Internet content providers. While the allegations were brought to the jury with the aim of seeking for remedy, Microsoft argued that it did not illegally restrict the computer manufacturers ability to alter the Windows desktop screen observed by the users when they turn on their computers for the first time.
Ways in which the case help understand the above topic and issues
Fundamentally, the Microsoft Corporation antitrust case study is substantially important in improving our understa...
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