Case Study

On

Microsoft: Antitrust Battle

Course Name: Business Ethics

Course Code: BUS 224

Prepared For:
Md. Abul Mohiamen.

Lecturer, Faculty of Business

ASA University Bangladesh

Prepared By:
Mohammad Rubayat Ahmed 071-12-425
Md.Nurul Islam 071-12-447
Mostafizur Rahman 071-12-422
Foyad Hossain Khan 071-12-452
Md.Nurul Islam 071-12-447
Abu MD. Zakaria 071-12-454

Date of Submission
22nd December, 2009
 Summary of Microsoft Antitrust Battle

In USA antitrust means competition. The Antitrust Act is to maintain fair competition in
the market to ensure equality among competitors and provide benefit to the customers.
This Act is to stop monopolization in the market. In this case we can see how Microsoft
was violating the law. Although it is helping the economy and providing numerous
charity funds it was violating the antitrust law. To create monopoly it sold its MS DOS to
original equipment manufacturers. Microsoft stole Java codes to build its own programs,
stopped making Macintosh compatible programs and integrated IE to Windows to crush
Netscape Navigator. All those actions were to annihilate the competitors and gain full
power over the market. Eventually Microsoft was brought in to court for justice.
Settlement Provisions were approved by the court in order to implement a fair
competitive market. After all these legal battles Microsoft is now focusing on developing
new products.
 1. Why there has been so much debate about the software industry and Bill Gates?

Answer: Bill Gates was the CEO of Microsoft till 2000. From 1990 Federal Trade
Commission started investigation for violating antitrust law. The allegations were,
 Selling MS Dos operating systems to original equipment manufacturers and
giving discount.
 Stopped making Apple’s Macintosh PC compatible Programs in order to
annihilate competition.
 Stealing Java Codes.
 Integrating Internet Explorer into windows leaving no options to rival web
browsers in order to destroy Netscape Navigator.

For those actions against antitrust there had been so much debate.

2. What legal and ethical issues in Microsoft case can relate to US culture, and do these
same issues extend to other countries that use Microsoft products.
Answer: In USA Antitrust means competition law. In wide sense it means that company
must ensure a fair competition in the market and stop monopolization. Three basic things
that US Antitrust Act maintains,

I. Prohibiting cartels.
II. Monitoring the actions of company that might dominate the company in the
market.
III. Supervising joint ventures, mergers.

Earlier before the world war two it was in USA alone. But after that every country started
to follow US Antitrust Act in order to ensure fair competition in their markets like US
does. But still it may vary from country to country. For example EU has dropped the
Microsoft Antitrust case when Microsoft settled to create options to rival web browsers.
3. Discuss Microsoft’s corporate culture with respect to the legal issues involved.

Answer: As a successful software giant, Microsoft maintains its corporate culture strictly.
Basic characteristics of their corporate culture are,

a) Competitive: Microsoft’s corporate culture is heavily competitive.

b) Rivals: Its rivals are familiar.
c) Cartels: to maximize profit it also makes cartels
d) Development: After the settlement of antitrust case, Microsoft seems to have
developed their corporate culture.

4. Identify the types of power associated with each player in this case and discuss how
and why each player is using these types of powers. What are the potential ramifications
of their actions?
Answer:
Bill Gates: Holds the power of innovating and controlling the market. bill Gates has
developed products like Windows, Office Programs, and IE. He also made cartels to
destroy competition and establish a monopoly in order to maximize company’s profit.
Federal Trade Commission: Started the investigation on Microsoft having the
allegations of breaking the Antitrust Act. It main objective is to ensure a fair
competition in the market.
Judge Jackson: For his wisdom Microsoft was found guilty. He ordered to split the
Microsoft in to two. Because bullying competition, and its “untrustworthy” behavior.
Department of Justice: DOJ quickly solved the case in order to ensure fair justice to
the competitors and the customers.
Competitors: Apple Computer, Sun Microsystems, and Netscape Navigator played a
vital role. They took prompt actions to stop monopolization and injustice. They filed
lawsuits to have the competition rights. Each of the company helped to find Microsoft
guilty.