Microsoft The Cost Of Monopoly Business Computer Science Essay

Published: Last Edited:

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Microsoft Corporation is the largest computer technology corporation in the world. It success has come through its Software operating systems (SOS) series named Windows and Microsoft office. Windows series SOS gave graphical user interface for personal computer (PC) users, work group server OS and over the years it has become the most used SOS for PC's and servers over the world. This windows series SOS have given it the majority of market share which is more than 90%. As Microsoft Corporation became the SOS giant and no other rival company to compete with its market share it has taken the monopoly business strategy. As PC users get their own package of SOS for their PCs which includes internet browser, music player and document writer they kind of get used to windows package which allowed Microsoft Corporation to hold their position in market.

Allegations against Microsoft:

In December 1998, Sun Microsystems which later on had been purchased by Oracle Corporation complained that Microsoft does not share and provide their interface information for Sun to be able to develop and build application which will sing properly with the ubiquitous Windows SOS. And which will prevent compete in the market of work group server operating systems. Microsoft denied sharing their interface information on the basis of reliability, speed and security that ensured its market share and a successful launch of windows server 2000 PC operating system. Utilities and other softwares that come with windows OS has restricted other developer to build and promote their own softwares for PC users.

EC stand against dominant market abuse:

The European Commission stand against Microsoft market strategy was because of its existing Antitrust law. Which summarize that commission will take steps on its EU market if distorted. It will ensure and help a healthy competition culture within the community. It will ensure that dominant business policy does not prevent competition in market and does not harm consumers and innovation. Corporation monopoly approach to market will harm competition and to run a fair competitive market it will investigate and force its existing law.

Practicing monopoly business:

The case against Microsoft's business strategy in European Union market was originated in December 1998 from a complaint from Sun Microsystems accusing Microsoft of not sharing and supplying interoperability information necessary to exchange and use information with Microsoft's market dominant OS. The EU commission launched an investigation about Microsoft Windows OS and its business practice. This investigation revealed that Microsoft had similar accusation of its monopoly market strategy in US. A majority of customers informed the commission that Microsoft's non-disclosure of interface information virtually gone in favor of Microsoft's server products. Microsoft own survey result showed that this non disclosure of interface information helped Microsoft to grow its market shares. The commission enlarged its investigations further and found out that Microsoft is tying its Windows Media Player with the company's Windows 2000 pc operating system. This caused and reduced other media company to take incentives for music, films. The consequences was narrowing the market to its rivals, competitors that resulted end user to compromise their choice and gave Microsoft the favor to control digital media market over the internet.

Investigations:

After a five year investigation carried over by European Commission, Microsoft found guilty over conduction non competitive business manner and having a monopoly business strategy to its EU market. Which result leveraging its near monopoly PC operating systems for work group servers OS and for media players. Commission found Microsoft practicing the same business attitude to rule its large share in market after its five year of investigations and violating EU Treaty's competition rules by abusing its huge share in market for PC users. Microsoft was accused of intentional denial of sharing interface information of its OS to non-Microsoft work group servers and in one sense forcing user to use Windows Media Player with its own OS. This gave Microsoft to aceive a dominant market position in server operating systems. That resulted suppressing competitors to gain access in corporate IT networks market. The commission also found that its steps significantly reduced competition on the media player market.

Result:

As European Commission (EC) found Microsoft Corporation guilty according to Article 82 of the Treaty establishing the European Community of abusing its dominant market in EU to reduce competition the Commission has ordered Microsoft to disclose to competitors, within 120 days, the interfaces required for their products to be able to talk with the ubiquitous Windows OS. Microsoft also ordered to offer a version of its Windows OS without Windows Media Player to PC manufacturers or when selling to end user within 90 days. In addition, Microsoft is fined €497 million for abusing its market power in the EU.

In future actions taken by EC against Microsoft dominant market abuse will prevent tied up its consumers or PC manufacturers to its own product. This will boost consumers of choice and results in larger innovative products on the market. As Microsoft is legally bonded in commitment to remove this barrier to competition by EC for five years its OS has to offer browser choice menu for end users on computer screen. Users will get far better choices for their own software usage. User will be offered browser choice screen that will include 12 most popular web browsers in the market and information about their producer to help making a better choice. Microsoft also ordered to provide a version of Widows not including Windows Media Player. This will lead to more innovation in related products like digital content, softwares, web technology etc.

Now a days there is a consumer market for open source OS which getting popular day by day. As EC rule will give customers the freedom of choice and go beyond Microsoft own labeled product to taste and use them will certainly make PC users experience better than before. Microsoft will face new challenge to maintain and supply quality product to consumers with lower price tag. Last of all EC actions will make beneficiary competitors as well as the consumers to level of end user.