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.