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Tying concepts

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In a celebrated case tried during 1998, the department of justice charged microsoft corporation with a wide range of anticompetitive behavior. Among the charges leveled by the DOJ was the allegation that Microsoft Illegaly "bundled" the sales of its microsoft explorer with its basic windows operating system. DOJ alleged that by offering a free browser program, microsoft was able to extend its operating system monopoly and "substantialy lessen competition and tend to create a monopoly" in the browser market by undercutting rival netscape communitcations, Inc. Microsoft retorted that it had the right to innovate and broaden the capability of its operating system over time. Moreover, Microsoft noted that Netscape distributed its rival internet browser software netscape navigator free to customers, and that it was meerly meeting the competition by offering its own free browser program.

A. Explain how microsofts bundling of free internet browser software with its windows operating system could violate US antitrust laws, and be sure to mention which laws in particular might be violated.

B. Who was right in this case? In other words, did Microsoft's bundling of Microsoft Explorer with Windows extend its operating system monopoly and "substantially lessen competition and tend to create a monopoly" in the browser market?

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In a celebrated case tried during 1998, the department of justice charged Microsoft corporation with a wide range of anti-competitive behavior. Among the charges leveled by the DOJ was the allegation that Microsoft Illegaly "bundled" the sales of its microsoft explorer with its basic windows operating system. DOJ alleged that by offering a free browser program, microsoft was able to extend its operating system monopoly and "substantialy lessen competition and tend to create a monopoly" in the browser market by undercutting rival Netscape communications, Inc. Microsoft retorted that it had the right to innovate and broaden the capability of its operating system over time. Moreover, ...

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Hatim Baxamusa, MBA
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  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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