Microsoft Business Story and the Antitrust Case

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ID: 126398

The Microsoft Corporation was founded in 1975 by Bill Gates and, with the aggressive
marketing of MS-DOS, quickly became a major software vendor in the home computer industry.
In 1985, Microsoft released its first version of Microsoft Windows, and then quickly expanded
its software offerings to include Microsoft Office in 1989, a business operating system with
Windows NT 3.1 in 1993, and a web browser with Internet Explorer (hereinafter “IE”) in 1995.
Microsoft has also expanded its product line into the World Wide Web with MSN (Microsoft
Network) in 1995, and personal gaming with the Xbox in 2002. While its major early releases of
Windows for personal computing were Windows 3.0 in 1990, Windows 3.1 in 1992, and
Windows 95. Basically, Microsoft was dominating in the microcomputer-software industry, but
this was not only, they jumped by dominating the applications, operating systems, peripherals
and, book publishing, etc.
Microsoft as one of the biggest tech compering industry was under investigations by the FTC of
the Federal Trade Commission for violating antitrust law along with IBM. Microsoft made a
computing software that was pre-installed on Windows OS which created conflict with smaller
companies, and they felt that this was an unfair competition. One of these companies, was
Netscape and they were very unhappy with the Microsoft’s behavior, so the FTC took the action.
The case led to a compromise of Microsoft being able to remain as one company, while now
having to share software with other companies to keep them competitive. This became as one of
the larges antitrust cases (full of fire and passion)! The main point of that was to enable other
companies to enter the market, not only super zooming the Microsoft. The original purpose of
the antitrust law was very simple – to protect the consumers by promoting competition in the
workplace, it worked to make sure that one company never had full control over its industry and
to ensure that possible monopoly was returned to a smaller state to compete with the rest
companies producing.
The 1st major case of Microsoft began in August 1993 when the Department of Justice and the
FTC getting two case deadlocks against Microsoft even though they were not declared officially
monopoly on the market, until the presiding judge Thomas Penfield Jackson declared this on
November 5th, 1999 and proposed that Microsoft could be broken in two companies – one for
Windows operating systems and one for other products, keeping in mind that during these time
Microsoft had control over 90% of the market, that figured Microsoft was a monopoly! The
important fear of the government was that Microsoft would kill Netscape and all other
competitors and will monopolize the browser market and use that point of control to dominate
the coming age of the web. After a tough fight, the government won the case. There is now no
browser monopoly, and the world has come to rely on the many apps, firms and ideas that were
born after Microsoft’s control was broken. Microsoft has become a gentler giant, and Mr. Gates
has become a philanthropist.
Yet it is worth remembering that at the time, challenging Microsoft was not a popular decision.
Microsoft was a well-liked company and Bill Gates was widely heralded as a visionary genius.
Many, Microsoft most of all, argued that enforcing the antitrust laws against Microsoft would
damage innovation and impede the economic growth fueled by the technology sector.
This view turned out to be wrong. Innovation surged in the newly opened markets and the United
States continued to spearhead growth in the technological world. The enduring lesson of the
Microsoft case was that keeping markets open can require a trustbuster’s courage to take decisive
action against even a very popular monopolist.
Imagine this: A world in which Microsoft had been allowed to monopolize the browser business.
Holding a triple monopoly (operating system, major applications and the browser), Microsoft
would have controlled the future of the web. Google would have faced an unfair fight against
Bing. Microsoft-Myspace might have become the default social network instead of Facebook.
And who knows whether Netflix or any other online video service would have been started?!
Google, Facebook and Amazon, the immediate beneficiaries of the Microsoft antitrust case now
became behemoths themselves (the largest companies worldwide), but doesn’t it seem like a
cruel irony! Maybe yes, but this is the business world and how the innovation cycle works, it
adds room for smaller or start up companies to grow up, but then prevents the giant companies
such as Microsoft in this case to outsize the market power that they used to have before.
However, besides all of these situations that the Microsoft suffered during that crucial period,
they missed the shift to smartphones and its Bing search service trails well behind Google, but
again it didn’t prevent Microsoft to make the transition to catch the next big wave in tech
platforms — cloud computing and recording over $3 trillion of profits!
Simply, an Antitrust Battle, doesn’t necessarily spell doom for any of these big tech companies!
In conclusion, courts and regulators must be willing to recognize the way that technology can
influence antitrust analysis, without losing sight of the ultimate goal: fostering competition.
I can mention a quote by - Helen Keller, who says:
“Character cannot be developed in ease and quiet. Only through experience of trial and
suffering can the soul be strengthened, ambition inspired, and success achieved”.
The same counts for companies as well, as much as they are in trial and suffer the weak periods,
that much they can be strengthened in their way to success and goal achievements!