The Case for Microsoft

The Case For Microsoft

The Case FOR Microsoft

As far as I've seen, 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. 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 Microsoft’s FREE browser. Remember: the charge is against including Internet Explorer with Windows, not the Windows monopoly itself. What this entire case boils down to is that a few Washington liberals are upset at Microsoft for daring to be successful. These are the kind of people that hate wealth, capitalism, and anything that is more successful than them. My intention is to show that the case against Microsoft as a monopoly is weak and that the government is wasting its time.

As the government jumps to the defense of the “all-too-often” taken advantage of consumer, they have accomplished very little. They tried to prevent the release of Windows 98 (a much anticipated and highly demanded program that was and is available at reasonable prices) but didn’t even phase the consumers second thoughts. The government is costing taxpayers millions of dollars to pursue this suit against Microsoft.

Microsoft’s operating system near monopoly is probably good for us. 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? Also, Internet Explorer brings browser competition to a market that is essentially monopolistic itself (at least if you apply Janet Reno's definitions of monopoly). Internet Explorer gives Netscape a competitive product where before virtually none existed.

The purpose of antitrust laws is to prevent only harmful monopoly. Microsoft’s operating system near monopoly is harmful in very few ways. Nor is Intel's chip near monopoly harmful, nor is Netscape’s 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. When Microsoft, or any other software company, makes a program they only have to write it once. When this is done, reproduction of this program is very simple. All they have to do is 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. With this situation occurring, a good program, once written, can be produced marketed at virtually no additional cost. Well you say, “if disks only cost 2 cents, why can't windows sell for 2 cents?” Remember that it costs Microsoft to develop a new program. No matter how cheap a disk is, other costs 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. As I said earlier, anyone with a good program can be successful in the computer industry. Programs come about all the time. For example, the most popular finance program is Quicken. Microsoft’s version, Money, is included with many of its programs yet Microsoft, the multibillion dollar a year company, has considerably less users than Quicken, with mere tenths and hundredths in sales than the annual income of Microsoft. Another example is Accessories Paint compared to Print shop or EXPLORER compared to NAVIGATOR. Microsoft offers its own products as complements to Windows, often for FREE, but consumers still prefer others. 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, AT&T and even Commodore, have or had large, sometimes monopolist-like markets.

Characteristics of monopolies that cause trouble are (1) restriction of output, (2) higher prices along with this restriction, (3) restriction of entry to a particular market and, in a few cases, (4) lack of innovation due to lack of competition.