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There is No Case Against Microsoft

A battle is raging in the United States Courts with the Microsoft Corporation. The federal government maintains that Microsoft's monopolistic practices are harmful to United States citizens creating higher prices and potentially downgrading software quality and should be stopped while Microsoft and its supporters claim that they are not breaking any laws and are just doing good business.

Microsoft's antitrust problems began for them in the early 1990's. When the Federal Trade Commission began investigating them for possible violations of the Antitrust Laws. Which are designed to stop the formation of monopolies. The investigation continued on without resolve, until Novell a competitor of Microsoft's filed a complaint. Doing this stalled the investigations even more until finally the case was handed over to the Department of Justice.

The Department of Justice moved quickly the case (they thought) finally ended on July 15, 1994, with Microsoft signing a consent settlement. The settlement focused on Microsoft's selling practices with computer manufacturers. Up until then Microsoft would sell MS-DOS and Microsoft's other operating systems to (OEM's) at a 60% discount if that OEM agreed to pay a royalty to Microsoft for every single computer that they sold. Regardless if it had a Microsoft operating system installed on it or not. After the settlement, Microsoft would be forced to sell their operating systems according to the number of computers shipped with a Microsoft operating system installed, and not for computers that ran other operating systems. Another practice that the Justice Department accused Microsoft of was that Microsoft would specify a minimum number of operating systems that the retailer had to buy. Thus eliminating any chance for another operating system vendor to get their system installed until the retailer had installed all of the Microsoft operating systems. In addition to specifying a minimum number of operating systems that a vendor had to buy, Microsoft also would sign contracts with the vendors for long periods of time such as two or three years.

So in order for a new operating system to gain popularity. It would have to do so quickly. In order to show potential buyers that it was worth something. With Microsoft signing long term contracts they eliminated the chance for a new operating system to gain the popularity needed. Probably the second most controversial issue and the cause of their problems now are Microsoft's practice of tying.

Tying is a practice in which Microsoft uses their leverage in one market