Microsoft Antitrust Paper -- essays research papers fc

Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible Personal Computer (PC) operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows, the operating system of all PC's. Microsoft enjoys so much power in the market for Intel-compatible PC operating systems that if it wished to exercise this power solely in terms of price, it could charge a price for Windows substantially above that which could be charged in a competitive market. Moreover, it could do so for a significant period of time without losing an unacceptable amount of business to competitors. In other words, Microsoft enjoys monopoly power in the relevant market. Microsoft possesses a dominant, persistent, and increasing share of the world-wide market for Intel-compatible PC operating systems. Every year for the last decade, Microsoft's share of the market for Intel-compatible PC operating systems has stood above ninety percent. For the last couple of years the figure has been at least ninety-five percent, and analysts project that the share will climb even higher over the next few years. Even if Apple's Mac OS were included in the relevant market, Microsoft's share would still stand well above eighty percent. Microsoft's dominant market share is protected by the same barrier that helps define the market for Intel-compatible PC operating systems. As explained above, the applications barrier would prevent an aspiring entrant into the relevant market from drawing a significant number of customers away from a dominant - 1 - incumbent even if the incumbent priced its products substantially above competitive levels for a significant period of time. Because Microsoft's market share is so dominant, the barrier has a similar effect within the market: It prevents Intel-compatible PC operating systems other than Windows from attracting significant consumer demand, and it would continue to do so even if Microsoft held its prices substantially above the competitive level. Microsof... ...-interest. - 4 - Bibliography New York Times: "How Microsoft Sought Friends In Washington." 7 November 1999: A33 "Microsoft's Horizon." 7 November 1999: A33A "A Breakup Of Microsoft? Possibly, but Investors Shrug It Off." 9 November 1999: C1-C16 "Prosecutors Seeking To Break The Grip Of Windows System." 10 November 1999: A1-C30 "Microsoft Faces A Class Action On 'Monopoly.'" 22 November 1999: A1-A16 USA Today: "Conservative judge at helm of Microsoft talks." 22 November 1999: B1-B2 "Microsoft findings spur lawsuit findings." 23 November 1999: B2 The Wall Street Journal: "Microsoft Hopes for GOP Savior, but States Are Problem." 9 November 1999: A28 Financial Times: "Experts say Microsoft case will drag on." 9 November 1999: 11 - 5 - Microsoft Antitrust Paper -- essays research papers fc Viewed together, three main facts indicate that Microsoft enjoys monopoly power. First, Microsoft's share of the market for Intel-compatible Personal Computer (PC) operating systems is extremely large and stable. Second, Microsoft's dominant market share is protected by a high barrier to entry. Third, and largely as a result of that barrier, Microsoft's customers lack a commercially viable alternative to Windows, the operating system of all PC's. Microsoft enjoys so much power in the market for Intel-compatible PC operating systems that if it wished to exercise this power solely in terms of price, it could charge a price for Windows substantially above that which could be charged in a competitive market. Moreover, it could do so for a significant period of time without losing an unacceptable amount of business to competitors. In other words, Microsoft enjoys monopoly power in the relevant market. Microsoft possesses a dominant, persistent, and increasing share of the world-wide market for Intel-compatible PC operating systems. Every year for the last decade, Microsoft's share of the market for Intel-compatible PC operating systems has stood above ninety percent. For the last couple of years the figure has been at least ninety-five percent, and analysts project that the share will climb even higher over the next few years. Even if Apple's Mac OS were included in the relevant market, Microsoft's share would still stand well above eighty percent. Microsoft's dominant market share is protected by the same barrier that helps define the market for Intel-compatible PC operating systems. As explained above, the applications barrier would prevent an aspiring entrant into the relevant market from drawing a significant number of customers away from a dominant - 1 - incumbent even if the incumbent priced its products substantially above competitive levels for a significant period of time. Because Microsoft's market share is so dominant, the barrier has a similar effect within the market: It prevents Intel-compatible PC operating systems other than Windows from attracting significant consumer demand, and it would continue to do so even if Microsoft held its prices substantially above the competitive level. Microsof... ...-interest. - 4 - Bibliography New York Times: "How Microsoft Sought Friends In Washington." 7 November 1999: A33 "Microsoft's Horizon." 7 November 1999: A33A "A Breakup Of Microsoft? Possibly, but Investors Shrug It Off." 9 November 1999: C1-C16 "Prosecutors Seeking To Break The Grip Of Windows System." 10 November 1999: A1-C30 "Microsoft Faces A Class Action On 'Monopoly.'" 22 November 1999: A1-A16 USA Today: "Conservative judge at helm of Microsoft talks." 22 November 1999: B1-B2 "Microsoft findings spur lawsuit findings." 23 November 1999: B2 The Wall Street Journal: "Microsoft Hopes for GOP Savior, but States Are Problem." 9 November 1999: A28 Financial Times: "Experts say Microsoft case will drag on." 9 November 1999: 11 - 5 -