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ANTITRUST CASE AGAINST MICROSOFT.

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Analyzes govt.'s case against computer firm. Overview of antitrust law & assessment of arguments & rhetoric on both sides of case.... More...
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Paper Abstract:
Analyzes govt.'s case against computer firm. Overview of antitrust law & assessment of arguments & rhetoric on both sides of case.

Paper Introduction:
Introduction The American court system is structured to be adversarial. Nowhere is the form of argument taken to a higher level. Lawyers by definition should be great debaters, paid to make the best arguments in favor of their clients. Only when lawyers make the best arguments do they succeed in proving their case and perform their job successfully. Currently the lawyers at the Microsoft Corporation are busy trying to come up with the best arguments possible to prove the company has not been engaged in the monopolistic and anticompetitive practices of which it has been accused. A brief synapsis of what led to the situation Microsoft now finds itself in is presented at the onset of this paper. It includes a brief history and description of U.S. antitrust

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[On-line]. This line of reasoning is referred to as an argument fromauthority in its simple form. The Department of Justice could be accused of providingthis type of argument as well. Available: www-cse.stanford.edu/class/cs2 1/current/projects/corporate-monopolies/government_history.html Johnston, M., Ferranti, M., Silwa, C. The attorneyGeneral alleges that the company is taking advantage of its existingWindows monopoly to compound the effects thereof and further entrench thenear-single supplier situation that Microsoft currently enjoys. [On-line]. Dell, McNealy,Gates grilled by Senate. During the hearings, Michael Dell, who is recognized as a Microsoftally and therefore considered potentially biased, was called upon tovalidate the claim that Windows compatibility was, in fact what thecustomers wanted. [On-line]. The Department ofJustice is asserting that since Windows 95 includes Internet capabilities(similarity premise), and 9 percent of PCs use the Windows 95 operatingsystem (attribution premise), Microsoft's Internet browser will be used bynearly 9 percent of PC users (projected attribute). References DOJ seeks Microsoft fine. [On-line]. Finally, the paperconcludes with some thoughts on the overall effectiveness of the defenseand the chances for Microsoft to come out victorious in this battle.Background Antitrust regulation in this country was initiated by the lobbyingefforts of a group of farmers known as 'Grangers' who were protesting therailroads' monopolistic practice of setting artificially high prices. The FederalTrade Commission was also created at that time to support conditions thatlead to competition (Government regulation of monopolies..., 1999, online). [On-line].Available: europe.cnnfn.com/digitaljam/971 /2 /microsoft Government regulation of monopolies: History of antitrust regulation.(1999, March 1). Aneconomist testifying in favor of Microsoft contends that "market sharealone doesn't indicate a monopoly and points out that the company can'tcharge a monopoly price because it faces competition from rival operatingsystems, potential new market entrants, and pirated software" (Wasserman,1999, Online). Stanford. A brief synapsis of what led to the situation Microsoft now findsitself in is presented at the onset of this paper. Microsoft responds to economist'stestimony. Webster's dictionary provides astraightforward non-technical definition of monopoly as "exclusive controlof a commodity or service in a given market, or control that makes possiblethe fixing of prices" (Microsoft the monopoly, 1999, online).Specifically, Microsoft has been accused of violating a 1995 antitrustsettlement, effectively cutting out competition and putting the company ina position to fix rates. The decree in question "allows Microsoft to integrate software intoits Windows operating system, but not to force companies to license Windowson condition that they also accept a second, separate product" (Johnson,Ferranti, & Silwa, 1998, Online). [On-line]. Microsoft brought in its own expert witnesses to testify tojust that. Available:cwstage2.cw.com/home/news.nsf/all/99 1 52fisher The charges read further that "bythese contracts [with computer makers], Microsoft has unlawfully maintainedits monopoly of personal computer operating systems and has unreasonablyrestrained trade" (Microsoft the monopoly, 1999, online). The fallacy in theDepartment of Justice's argument is their use of post hoc reasoning.Microsoft is asserting that the Justice Department incorrectly assumes thatMicrosoft's position in the market creates a monopoly situation simplybecause the large market share exists. Introduction The American court system is structured to be adversarial. This is an example of an argument from analogy. It served to place a check on a trend toward consolidation. Computerworld. The purpose of the charge was, inpart, to restrain Microsoft from "using exclusionary and anticompetitivecontracts to market its personal computer operating system software"(Microsoft the monopoly, 1999, online). It iscontended that Microsoft's overwhelming market share, coupled with anoverriding control of Internet services, will result in Microsoft eventualcontrol of electronic commerce, a market whose growth potential isenormous.The Arguments The Department of Justice has been broadening the scope of this casesince its inception way back in 1994, when the Attorney General's officefiled a complaint against Microsoft. Then Microsoft's defense is immediately follows, again with the typeand effectiveness of the argument being evaluated. His statementthat Windows-based platforms are what the customers are demanding,validates Microsoft's claim that they are merely responding to consumers'needs, as long as it is assumed that his testimony is truthful andstraightforward. (1999, January 1). VT. The second separate product beingreferred to is Microsoft's Internet browser, which comes preinstalled onthe Windows 95/98 operating system. Micheal Dell runs the Dell Corporation, a majormanufacturer of computers and valued customer of Microsoft. Following that the paper takes a point/counter point structure.First, one of the U.S. In order to truly understand the arguments presented in this case andmake a reasonable determination of their validity, it is first necessary toknow the meaning of monopoly. The regulatory commission created by this Act was charged withensuring "just and reasonable rates from businesses and to prevent theformation of monopolies" (Government regulation of monopolies..., 1999,online). The Sherman Antitrust Act (189 ) was the next major policy piece topass. Nowhereis the form of argument taken to a higher level. Scott McNealy, Chairman and CEO of Sun, claims that Microsoftexploited its Java-based technology and incorporated the Windows platform,thereby restraining the availability and use of Sun's version of Java.Microsoft has counter-argued that, although they did incorporate theWindows platform into Java programming, they were only doing so in responseto customer demand. This is referred to as undermining counterevidence. It includes a briefhistory and description of U.S. CNNfn. About 9 percent of today's PCs areequipped with Windows 95/98 (Microsoft the monopoly, 1999). Anyactions that lessen competition substantially or tend to create a monopolysituation are prohibited by the Clayton Antitrust Act (1914). (1998, November 11). (1998, March 3). It is implied that Microsoft will have thelion's share of users employing their browser to get on the Internet, basedon the fact that their Windows 95 platform is so widely used, but that isnot necessarily true.Conclusion There are strong arguments on both sides of this case. antitrust legislation, a working definitionof monopoly, and a summary of the actions of Microsoft that led up to thisscenario. Particularly significant is the role that the government carvesout for itself in terms of regulating the high tech sector of our economy.Considering how quickly the computer industry is expanding in its impact onthe global economy, the answer will have impacts that will resonate far andwide. Currently thelawyers at the Microsoft Corporation are busy trying to come up with thebest arguments possible to prove the company has not been engaged in themonopolistic and anticompetitive practices of which it has been accused. Available:www.computerworld.com/home/print.nsf/all/9811 974 E Wasserman, E. Sun Microsystems Inc.'s representatives, for instance, arearguing just that. In terms of the argument that Microsoft's vast market share impliesit can engage in price-fixing has also been dismissed by Microsoft. Thefirst legislation passed on this topic was the Interstate Commerce Act(1887). The argumentshave touched upon the very foundations of antitrust laws and theimplications for the future of this fast-paced, ever-growing industry areimmense. Available:www.vt.edu:1 21/J/jagreear/MICRO/MICRO.HTM Nader, R. Computerworld. Computerworld. and Love, J. Lawyers by definitionshould be great debaters, paid to make the best arguments in favor of theirclients. Available:www2.computerworld.com/home/online9697.nsf/All/ 98 3 3dell1D49A Microsoft the monopoly. Only when lawyers make the best arguments do they succeed inproving their case and perform their job successfully. Department of Justice's points against the softwaregiant is given, accompanied by an analysis of the type of argument beingused. Even if it istrue that Microsoft has a disproportionately large market share (obviouslya given), it is not necessarily true that the company holds a monopolybecause there is, in fact, competition in the market (also undeniable giventhe existence of Netscape and Sun Microsystems). (1999, March 1). This is a soundargument only if the Windows 95 operating system somehow creates barriersto other Internet browsers, either in access, installation, orcompatibility. Affirming the consequent is a process where a one improperlyconcludes that a statement is true simply because the premise implies thatsomething is true. It is a basic tenet of capitalism that companies havethe freedom to offer products based on what consumers are demanding at anygiven time. Why Microsoft must bestopped. (1997, October 2 ).

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