Global Monopoly Power – Microsoft

Microsoft is a multinational computer technology corporation that develops, manufactures, licences and supports a wide range of software products for computing devices. Microsoft is one of the biggest software companies in the world but has come under criticism due to them acting like a monopoly.
There are three facts that indicate that Microsoft enjoys monopoly power. First is that their share in the Intel-Compatible Pc Operating systems is very large and stable. In the computing market Microsoft enjoys so much power that if it wished to use this power solely in terms of price, it could charge the price for windows for above what it would be charged in a competitive market. It could do this for a long period of time without losing an unacceptable amount of business to its competitors. Second is that they have protected market share thanks to barriers to entry. And a third is that Microsoft’s customers lack a good alternative to windows for the same price.
In the computing market Microsoft enjoys so much power that if it wished to use this power solely in terms of price, it could charge the price for windows for above what it would be charged in a competitive market. It could do this for a long period of time without losing an unacceptable amount of business to its competitors.
Microsoft has used anti-competitive methods to protect their market share. One example of this is when Microsoft launched ‘Internet Explorer’ to challenge Netscape’s ‘Navigator Internet Browser’. Microsoft saw Netscape’s internet browser as a threat to Windows 95 sales so Microsoft bundled in the ‘Internet Explorer’ with Windows 95 for free. This instantly made Microsoft the favoured computer maker which left Netscape having to operate at a loss in order to compete with Microsoft. Netscape nearly collapsed due to this but America online saved them by buying them up.
Recently (January 2009) Opera Software ASA filed a complaint to the European commission Stating that Microsoft’s inclusion of Internet Explorer with windows-based personal computers is a violation of European competition laws.