Monopoly Or Is It Just Phony Many people, with the government are trying to label Microsoft as a monopoly. Why is there any delay going around doing that? There is no reason to brand Microsoft as a monopoly. There is part of monopolistic competition and supply-demand acting on this case. The whole trial is about the free internet browser, Internet Explorer, that Microsoft gives out free and includes with its Operating system, Windows. Netscape does the same marketing of its product except that it does not have any operating system to sell with. Netscape is a relatively older browser and prior to Internet Explorer, there was only one browser, Netscape.

There have been innumerous upgrades and newer versions of these browsers since Internet Explorer’s launch in the market. The computer industry is very volatile in itself. Any literate programmer could develop better operating system or browser in the near future. If his/her product is good and he/she have proper marketing available he/she could become the next monopolistic. The industry itself changes with its needs.

Innumerous companies in the past have enjoyed monopolist markets like IBM, Intel, and AT. As of today, these past “monopolists” are a part of the industry and no longer are monopolists. No firm can restrict the entry of any other firm into this field (at least of free browsers) except by direct interference and/or by merging, to which there are anti trust laws restricting those activities. Any firm could loose its monopolist position if it looses its power over a key resource. Here, the key resource is knowledge, which is unlimited and unrestricted. Microsoft has been monopolist in this field for a longer period because of its evolution and enhancement of its products.

Netscape would have been in power if it had thought of more upgrades and improved quality. The government’s role is to prevent harmful monopoly. A harmful monopoly arises when a company starts abusing its power as a monopoly. A harmful monopoly restricts output of the market creating greater demand and thus charging higher prices. A harmful monopoly also does not innovate or change since there is no matching competition.

By charging higher prices and having power over key resources a monopoly could restrict entry of other potential competitors. Microsoft does not violate any of these criterion for a monopoly. It has created competition and it does not charge ridiculously on its major software like Windows. The charges on the software reflects not the cost of making copies of the software but the high salaries of programmers, and cost of packaging, printing costly manuals and providing other support and services. Would you like to have 10 different operating systems each with different software and memory formats.

So that we have to use 10 different floppy disks to work, school, at friends’ place, at uncle bob’s, in the park with our lab tops, just to name a few. The world would become ridiculous if we were to have any more software companies. Amongst all these data conflict there is only one media that has remained unchanged, at least as a whole – the Internet. The government has given exclusive rights to retain a monopoly to safeguard all information on the internet. This is an example of a natural monopoly created by the government, for Network Solutions, Inc.

This should be done in the operating system industry too to reveal us of buying and bookkeeping different software and floppies. If Microsoft is shattered today then tomorrow there will be another major monopoly created because of so much demand in the industry for faster change. This would become a terrible vicious cycle. Instead, the government should just resolve the matter by putting the case in sole hands of the any software giant like Microsoft, Macintosh, Unix, and Linux (this O/S is absolutely free). Bibliography microsoft.com redhatlinux.com Economics Essays.