Microsoft Case

As far as I’ve seen, this entire ordeal is over a FREE browser that Microsoft
includes with windows for FREE and gives out on the internet for FREE just as
Netscape and most other browser companies do. I have yet to see where Microsoft
is charging extraordinary prices for any of these FREE programs nor do I see how
Netscape, in using the governments definition, a “monopoly” itself, is
“being forced out of business” by Microsofts FREE browser.


Remember: the charge is against including Internet Explorer with Windows, not
the Windows monopoly itself. What this entire case boils down to is that a few
Washington liberals are upset at Microsoft for daring to be successful. These
are the kind of people that hate wealth, capitalism, and anything that is more
successful than them. My intention is to show that the case against Microsoft as
a monopoly is weak and that the government is wasting its time. As the
government jumps to the defense of the “all-too-often” taken advantage of
consumer, they have accomplished very little. They tried to prevent the release
of Windows 98 (a much anticipated and highly demanded program that was and is
available at reasonable prices) but didnt even phase the consumers second
thoughts. The government is costing taxpayers millions of dollars to pursue this
suit against Microsoft. Microsofts operating system near monopoly is probably
good for us. It is much better to have one operating system than 20 or even 2.


Software compatibility, technical support, and setup are much more simplified
with one operating system. Programs today are specifically designed to be
“Windows compatible.” Would you rather have 20 (local) phone
companies, each with a different line and number running into your house or one,
as is the case now? Also, Internet Explorer brings browser competition to a
market that is essentially monopolistic itself (at least if you apply Janet
Reno’s definitions of monopoly). Internet Explorer gives Netscape a competitive
product where before virtually none existed. The purpose of antitrust laws is to
prevent only harmful monopoly. Microsofts operating system near monopoly is
harmful in very few ways. Nor is Intel’s chip near monopoly harmful, nor is
Netscapes browser near monopoly. Other reasons easily explain how Microsoft
came about to its size and how new companies constantly spring up in the
computer industry. Computer software is a very volatile industry. To succeed in
this industry all you basically need is a good program and a way to offer it for
sale. When Microsoft, or any other software company, makes a program they only
have to write it once. When this is done, reproduction of this program is very
simple. All they have to do is copy it on a disk. Since making an extra disk
containing the program costs all of 2 cents, it is more costly for the software
company to print the box and manuals than it is to make one extra disk. With
this situation occurring, a good program, once written, can be produced marketed
at virtually no additional cost. Well you say, “if disks only cost 2 cents,
why can’t windows sell for 2 cents?” Remember that it costs Microsoft to
develop a new program. No matter how cheap a disk is, other costs such as
salaries, factories, storage, and programmers always exist. Even though
development costs are sunk and additional production costs are nonexistent,
other costs are incurred. Besides, supply and demand determines where a price
will fall. Another thing about the computer market is its ever-changing program
market. As I said earlier, anyone with a good program can be successful in the
computer industry. Programs come about all the time. For example, the most
popular finance program is Quicken. Microsofts version, Money, is included
with many of its programs yet Microsoft, the multibillion dollar a year company,
has considerably less users than Quicken, with mere tenths and hundredths in
sales than the annual income of Microsoft. Another example is Accessories Paint
compared to Print shop or EXPLORER compared to NAVIGATOR. Microsoft offers its
own products as complements to Windows, often for FREE, but consumers still
prefer others. For all we know, anyone literate in programming may develop a
better program than Windows. If consumers like it, we may soon find another
browser monopolist. For reasons similar to this, computer industry leaders have
vastly changed in just a few years. At times Apple, IBM, Intel, Netscape,
AT;T and even Commodore, have or had large, sometimes monopolist-like
markets. Characteristics of monopolies that cause trouble are (1) restriction of
output, (2) higher prices along with this restriction, (3) restriction of entry
to a particular market and, in a few cases, (4) lack of innovation due to lack
of competition. Not a single one of these problems is experience with Microsoft.


These problems are only drastic when an item is in a secluded market with no
close substitutes. Computers are definitely not necessities and there are few
barriers to entry in the computer market (the only noticeable being computer
literacy). Microsoft certainly does not restrict output and hold prices at
extreme levels. If they did, nobody would buy Windows 95 or 98 when it came out.


There is no reason to buy an upgrade except that people are looking for
something new or something bigger and better. New versions of Windows do not
sell because consumers arent forced to buy them. They sell because consumers
want them. Many of Microsofts major products are included with Windows.


Giving products away at no monetary cost is certainly not restricting output.


Even more, it is the lowest price the company can sell at. The only cost of
getting Internet Explorer, or Netscape Navigator for that matter, is a tied up
modem for about 45 minutes. This is even avoided when Explorer or Navigator are
included free with another piece of software such as Windows or, in Netscapes
case, the software you get when you sign up with an online service. Netscape had
an almost full monopoly (90%) and still has a semi-monopoly at 65-70% of the
browser market. So what they are worried about? They use the same methods of
distribution of their software by offering it for free and having Internet
providers include it with their registration software. Before Internet Explorer
came along, we sat for long periods waiting for browser upgrades. There was
essentially one browser – Netscape two point something. Upgrades have been
almost constant since the introduction of Explorer. The result: two companies
with advanced browsers competing to build a better browser. Microsoft is not the
only operating system to choose from. While very practical and well suited for
the current computer industry, Windows is not alone. Many other operating
systems, some even FREE, are available. There are around nine in the US alone:
Linux, Caldera, Solaris by Sun, BSDI, Unix for the PC by Digital, BeOS by Be,
Rhapsody by Apple, OS/2 by IBM, and the Macintosh OS. Globally there are bigger
companies that have more of the global market. So how is Microsoft a monopoly if
there are nine other substitutes in the US alone? Once again though we are not
really talking about the operating system market but I just had to make a big
point. Finally and most importantly, what right is it of the government to tell
Microsoft how it can and cannot configure its own software? Once Windows is
installed, consumers have the option of disabling as much of Windows as they
like. If you don’t like Explorer, disable it and get Netscape (for FREE). We
don’t need Janet Reno to decide this for us. Just remember that Microsoft is a
free company- able to write its own programs the way it wants to just as you can
do if you so desire! Don’t let Washington liberals fool you with their charges
when Microsoft shows hardly any characteristics that make a monopoly dangerous.


We are facing a great abuse of the governments anti-trust laws for their only
purpose is to stop dangerous (and ONLY dangerous) monopoly. Washington should
not be able to get in the way of a successful company over Microsofts right
to include their FREE software with their own program.