Free Essay with Case Study Analysis: Microsoft Anticompetitive Behavior

Introduction

A new statement about Microsoft was provided by the European Commission. The recent statement of the European Commission is that there is an urgent need to address the practices of Microsoft which affect the straightforwardness of the net, user choice, and overall competition. For Microsoft to be successful in protecting and extending its monopolies for decades, it has engaged in a design that is completely great. Anticompetitive tactics that are not lawful have been used by Microsoft to eliminate their competitors. This case will examine Microsoft's misconduct and its extended use of anticompetitive tactics.

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Analysis

Microsoft owns most products which are the monopoly which includes Windows operating system and office suite of productivity applications, Microsoft front page, Windows NT and web TV (Cusumario, Michael & Selby, 1998 pg 5, para 1). Some rivals systems had features that can make multiple programs run simultaneously at the same time. Such features have not started being offered by Microsoft. Windows came up with DOS standard, meaning it will be on top of other DOS. DR-DOS was a great rival in the DOS market. Microsoft has always used a strategy that is successful. The strategy includes; embracing, extending and then it extinguishes. Microsoft improves the efficiency of the product and also enhances features thus it is free to sell at any cost it desires. This conduct can successfully impair ability in the process of improving its efficiency ( Elhauge & Einer 2003, pg 256, para 1).

Microsoft illegally thwarted competition so that its software monopoly can be safe. Microsoft also violated consent decree by forcing those who were making computers to install its internet browser as part of the software. People choose superior DR-DOS over MS-DOS. This choosing made the windows to change so that windows would no longer be the interpolation of windows when running perfectly with DR-DOS. Windows for instance that displayed error messages that is ominous when used in along with DR-DOS. Microsoft also gave information about DR-DOS that is not true thus consumers wrongly judged DR-DOS. There were accusations that Microsoft was abusing power on personal computers in the way it handled operating systems and web browser. The case was whether Microsoft was allowed to tie Internet Explorer with its windows. People believed that Microsoft gained its victory from bundling the IE with its windows. Microsoft, however, claimed that merging of IE and windows was for completion and innovation purposes.

It was still a separate product according to opponents. It thus did not need to be tied with Windows since there was a different product which was available for Mac OS. According to Microsoft, it was free and very beneficial to its users. Opponents asserted that it was not open because the cost of development and marketing may have inflated the price of Windows. The US government became interested in Microsoft and began inquiring whether it was abusing its monopoly. Microsoft was sued with unlawfully maintaining trust through terms that are anticompetitive. They were also accused of antitrust violations and having conduct that is unlawful.

Solution

Microsoft is a natural monopoly business because the average cost continues to decline as output increases. Microsoft should, therefore, come up with a way of eliminating competition as it, not the point ( McGrath & Gunther, 2013, pg 7, para 3). The profits would gradually increase with Microsoft selling more of their products (Thiel & Peter, 2014, pg 3, para 4). The primary method which Microsoft has to restrain competition is by distributing its products at no cost to the consumers. The software would then become standard thus allowing Microsoft to start charging the consumers. Microsoft could also stop most piracy of its products if it wanted to. This would be prevented regardless of the laws of the country all without the filing of the lawsuit. A little value is provided by Microsoft in upgrading. This is because Microsoft is a monopolist. Microsoft should, therefore, avoid investing. Microsoft should also switch to recurrent-free licenses. People will have no choice since they have to pay to use their software. Microsoft will thus continue to get paid as long as consumers are using their software. Microsoft should also develop their technology.

Justification

The most excellent way in which consumers are harmed by Microsoft monopoly is through overcharging. This issue is not addressed by antitrust trial yet it is essential. If Microsoft reduced its price, the competition would not be stiff.

By developing technology, Microsoft will be able to eliminate competition.

By stopping piracy, Microsoft will build trust between its organization and consumers.

Microsoft should avoid innovations as this will provide a little value for every upgrade,

Switching to the recurrent-fee license model will help Microsoft increase its profits since consumers will have no choice but to use their software.

Summary

There has been a debate by the antitrust trial about whether Microsoft is a monopoly. Microsoft is a monopoly since it faces a lot of challenges regarding competition. The prices of Microsoft are not set about the cost of the competitors. That is why MS office is costly. Microsoft also sets values since it does not raise its prices. Barriers to competition are always present in a monopoly business. Microsoft can deal with competition by giving their software for free, failing to invest and by lowering the price of its products and by use of a per-processor license.

The critical legal issue in Microsoft case is illegal thwarting of completion so as ensure its software monopoly is extended and safe.

Monopoly is driven by Microsoft. Its products are generally not superior as compared to adobe. Adobe is the largest software company (Hitt & Michael, 2012pg 4, para 1) For example; windows are not stable, there are less secure, expensive and bloated. The only reason they are superior is that they have good marketing strategies (Macinta, 2008, pg 4, para1).

Microsoft is ripe when it comes to competition. Thus competitors do not have to keep them in court. Furthermore, consumers care about applications and not the operating system. Consumers also invest in products that they feel have functional applications and one that will be compatible with their hardware.

References

Cusumano, M. A., & Selby, R. W. (1998). Microsoft secrets: how the world's most powerful software company creates technology, shapes markets, and manages people. Simon and Schuster.

Elhauge, E. (2003). Defining better monopolization standards. Stanford Law Review, 253-344.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic management cases: competitiveness and globalization. Cengage Learning.

Macinta, T. W. (2008). Fast md5 implementation in java. Retrieved March 7, 2009.

McGrath, R. G. (2013). The end of competitive advantage: How to keep your strategy moving as fast as your business. Harvard Business Review Press.

Thiel, P. (2014). Competition is for losers. The Wall Street Journal, 2.