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2.

Case: Microsoft Anti-trust Case


Question (a)
The question intends to examine whether the US Government was right in proceeding the
anti-trust against Microsoft; discuss the disadvantages to customers when one company
dominates the industry and the call for encouraging competition.
The answer explains that antitrust case against Microsoft was wrong. It is argued that
Microsoft does not hinder Netscape's to run on the Microsoft system. It is also stated that
Microsoft does not use its operating system monopoly to gain control over the internet,
rather users have the confidence to buy computers and software knowing that the
company can bring innovations that is compatible with the other electronic items.
Microsoft is therefore not restricting the market by setting the standard, but enhancing the
possibility of building on the existing structure. It explains the various disadvantages to
consumers in case of a monopoly market structure existing in an industry such as less
choice for consumers, higher prices of the product, lack of innovation etc. The answer
also explains the reasons for competition is to be encouraged such as more choice of
products for consumers, lower prices, efficient allocation of resources, increase in
productivity, promotion of fair e practices, etc.
Question (b)
The question intends to discuss the importance of regulation against monopoly and
restrictive trade practices with reference to Microsoft.
The answer explains that MRTP ensures that all firms act by the rules of free and fair
competition that benefits the economy as well as the consumers and are not trapped by a
few and it will penalize any attempt at destroying the market. It prohibit abuse of
dominant position through unfair or discriminatory prices or conditions (including
predatory pricing), restricting production/development, denying of market access. It also
explained the case of Microsoft with respect to MRTP such as how Microsoft Included its
Windows Media Player with the Microsoft Windows platform, charged a higher price
when they ship PCs without its operating system and forces users not to use another
system by taking the option away from the control of OEM, modified Suns Java and
offers them for free or bundles them with their operating system etc.
However the answer could have discussed how Microsoft resorted to certain wrong
accounting practices like inflating the bill of its bigger customers, created some negative
publicity to affect the product of its competitors and advanced publicity to endorse its
products etc.