Propoasl

At the end of the 19th century, social and economic changes brought about by the Industrial Revolution threatened the viability of capitalism. By creating antitrust law, the government successfully curtailed the worst abuses of monopoly power. Now, at the end of the 20th century, we are in the midst of the Information Revolution. The applicability of 20th century law to the 21st century economic order is being tested by recent government action against the largest of the software giants, Microsoft Corporation.

A market is characterized by increasing returns to scale when the cost of producing an additional unit of a product goes down as the quantity of the product produced goes up. Electric power and other public utilities are examples of markets that exhibit increasing returns to scale. Most of the cost of providing electric power comes from setting up the infrastructure of power lines. Once that infrastructure is in place, pumping more and more power over those lines costs little. The presence of increasing returns to scale means that large companies can produce more efficiently than small companies. A market that has

It's inevitable that a successful company accused of monopolistic policies will throw up its hands and say "that's the whole point of business." Microsoft characterizes itself as a corporation, which attained success through good products and shrewd tactics, whose future success is far from determined. For Microsoft, these tactics include their relentless product shipping schedule, dogged if unspectacular technological improvement, brilliant marketing, and effective forging of corporate alliances. Microsoft has been a success for eighteen years in a fiercely competitive and fast-moving field. It is anti-capitalistic and a waste of taxpayer money to hound a company as successful as Microsoft.

Microsoft is always quick to point the rapid rate of improvement and cost in the computer industry, and in Microsoft products. The consumer reaps the benefits of constant competition and innovation. Every year, you can buy faster computers for less money, and software with more and more features. Microsoft contends that their practices are beneficial to consumers, who get a wide variety of products at ever-falling prices. There are many charming analogies that can be drawn. In his opening remarks to the Senate, Bill Gates proclaimed "The statistics show that the cost of computing has decreased ten million fold since 1971. That's the equivalent of getting a Boeing 747 for the price of a pizza. A more concrete example can be seen in the so-called "browser wars." Because of Microsoft and Netscape's fierce battle to attract more users to their respective World Wide Web Browsers, consumers have been rewarded. The products were developed extremely rapidly, even for software, with new features adopted at every turn. At this time, both are available on almost every possible platform and offered free to anyone who cares to download them. Microsoft is big, they admit, but not so big as to be able to exert undue control.

· Poole, Robert W., Jr. Unnatural Monopolies. Lexington, Massachusetts: D.C. Heath and Company, 1985.

In 1994, Microsoft signed an agreement with the Department of Justice. It stated that Microsoft could not require hardware manufacturers who license use of its operating system to license other software applications, but could produce and license integrated products. In 1995, the company released Windows 95, which integrated its Internet browser with the operating system. The Department of Justice began investigations of Microsoft months later, claiming that the browser was actually a separate product. They also made accusations that the company refused to contract with hardware producers who would not include its Internet Explorer software. Allegedly, purchasers had no choice but to comply in order to remain competitive, due to consumer opinions that Windows 95 was a technologically superior operating system. This would eliminate many competitors in the Internet browser market and create a virtual monopoly. Microsoft, and its CEO, Bill Gates, denied these exclusive dealing contracts, and argued that it was in compliance with the Department of Justice. They claimed that Internet Explorer had been integrated into the new operating system, and Windows 95 was, in fact, a single product.

Netscape is also hoping to evolve its browser into an operating system all its own, so as to protect itself from the IE 4.0 attack, but the problem with this strategy is obvious. Moving from the most dominant operating system into an application like browsers is much easier than moving from dominance in an application into operating systems. Microsoft's OS is so far ahead, it is hard to see a Netscape operating system being anything more than a niche system for the web-obsessed. There has been speculation of a possible alliance or even merger between Netscape, Oracle, and/or Sun Microsystems. Such a move would further solidify Netscape's stake in the corporate server market, which is the company's best hope for continuing profitab

Some topics in this essay:
Internet Explorer, Microsoft Corporation, Wide Web, Redmond Netscape, Department Justice, Microsoft United, Web Browsers, Trade Commission, Computer Reseller, Programming Interface, operating system, internet explorer, world wide web, world wide, wide web, department justice, windows 95, barriers entry, increasing returns, browser market, operating systems, increasing returns scale, windows operating system, microsoft world wide, internet explorer 40,