Indiana Wesleyan University United States versus Microsoft Discussion

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ADM-477: Business Law

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Perhaps one of the most famous monopoly cases in American business history involves the Microsoft Corporation. For years, Microsoft dominated the PC operating system market. As its operating system grew in popularity, so did the company’s word processing, spreadsheet, and presentation software. In fact, by the 1990s, Microsoft enjoyed a near monopoly in the application software arena. To maintain its dominance, the company used various tactics to impede competition. For example, it restricted competitor browser access to its operating system and designed its operating system to be incompatible with competitor application software.

The government sued Microsoft for its monopolistic practices, and the antitrust case was eventually settled. In the years following its settlement of the antitrust case against it, Microsoft has paid billions of dollars to settle cases with competitors, such as, AOL, IBM, and Sun Microsystems. Proponents of antitrust law view the Microsoft case as a victory, because it forced Microsoft to change its unfair trade practices and compensate competitors for the harm caused by them.

Upon successful completion of the course material, you will be able to:

  • Explain the various antitrust and unfair trade practice laws.

Resources

  • Textbook: The Legal Environment of Business

Background Information

The Federal Trade Commission is the government agency responsible for the enforcement of the Sherman Act, which regulates monopolies. Section 2 of the Sherman Act makes it illegal to monopolize any part of interstate or foreign commerce. It further prohibits any attempt or conspiracy to monopolize any part of interstate or foreign commerce. Cases involving attempts to secure a monopoly are very difficult to prosecute, because the government must show that the party had the intent to impede competition or achieve monopoly power. The existence of monopoly power is not in and of itself sufficient to prove wrongdoing. The government must show that the party used unfair trade practices to acquire and/or maintain its monopoly. Cases involving conspiracy require that the government prove intent to form a monopoly along with conduct aimed at accomplishing the intent.


Instructions

  1. Review the rubric to make sure you understand the criteria for earning your grade.
  2. In your textbook, The Legal Environment of Business, read Chapter 20, “Antitrust Law.”
  3. Using the Internet, research the United States v. Microsoft antitrust case.
  4. In a one- to two-page paper, explain:
    1. Facts of the case
    2. Procedural history of the case
    3. Questions of law before the court
    4. Outcome of the litigation
    5. Why you either support or oppose the outcome of the litigation
  5. Your one- to two-page paper should be 250 to 500 words.
  6. Follow APA formatting, including using 12-point font.
  7. Correct use of citations and references is required.
  8. When you have completed your assignment, save a copy for yourself, and submit a copy to your instructor using the Assignment submission page by the end of the workshop.
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