Monopoly Essays (899 words) - AOL, Netscape, Internet Suites

Monopoly? Joseph Economics This paper will show my opinion of Microsoft being branded a monopoly. I feel this example shows supply and demand in addition to monopolistic competition. 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. The government feels that Microsoft is creating a demand purely for their products by forcing its browser on suppliers and controlling prices. 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. 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? Internet Explorer brings browser competition to a market that is essentially monopolistic itself. 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. All they have to do is make a program and 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. But it does cost Microsoft to develop a new program. No matter how cheap a disk is, capital investment 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. 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, ATt 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. 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