Free Essay

Anti Trust Claims

In: Business and Management

Submitted By karrigo
Words 495
Pages 2
Antitrust Claims
Antitrust laws were put in place to preserve competition as the rule of trade. Microsoft was accused of violating antitrust laws, and engaging in anti-competitive behavior by illegally using its Windows operating system monopoly. Netscape contended that Microsoft’s anticompetitive practices caused anti-trust injury by violating the Sherman Act.
The Sherman Act
The Sherman ACT of 1890 prohibits every contract, combination, or conspiracy that restrains trade, or any attempted or actual monopolization or conspiracy or combination to monopolize. While the Sherman Act does not ban all forms of trade, it does stop those that are considered unreasonable. Fixing prices, rigging bids, and dividing markets are all considered violations of the Sherman Act (Anonymous, 2012). It is not illegal for a company to have a monopoly in their industry. However, if the organization attempts to hold their monopoly status through ventures that exclude other companies from having a hold in the market, then the Sherman Act comes into play.
Microsoft
As most of the world is aware, Microsoft is a monopoly. AOL Time Warner accused Microsoft of engaging in illegal practices to maintain this monopoly (Well & McMillan, 2003). The alleged anticompetitive practices pertained to their Windows operating system. The suit claimed Microsoft held its position as a monopoly in the personal computer operating trade by unlawful exclusionary conduct (Ohlhausen, 2008). In layman’s terms, Microsoft required other products they manufactured to be utilized with their operating system. They also created agreements that prohibited companies from purchasing competitor products, or working with competitors.
The United States Court of Appeals affirmed the decision that Microsoft did, indeed, violate the Sherman Act. However, they could find no justifiable evidence to prove that Microsoft gained its monopoly via illegal means (Ohlhausen, 2008). In a settlement, Microsoft was required to pay AOL Time Warner $750 million (Well & McMillan, 2003).
Analysis
I believe that Microsoft did, in fact, violate the Sherman Act. I base this on the court’s findings. Microsoft’s license restrictions did not allow OEMs to remove desktop icons, folders, or altering any portion of the desktop. Therefore, the OEMs could not distribute any browsers other than Internet Explorer. Microsoft also made it almost impossible to remove Internet Explorer from the Windows operating system, which gave them a strong foothold in the operating system market. These are just a few examples of how Microsoft manipulated the market. The most interesting facet in this case is that Microsoft is still the most well-known brand name in the world. A $750 million judgment is a drop in the bucket for this organization. As the technology market continues to change, Microsoft adjusts accordingly. Windows is still the most utilized operating system, and Microsoft’s monopoly has not faltered.
Conclusion
Although Microsoft violated the Sherman Act, the court’s decision had no real effect on their financial base. The company continues to grow and change as trends arrive and fade. Perhaps this is an example of one company pushing the limits.…...

Similar Documents

Free Essay

Anti Trust Laws

...a bad thing. There are naturally occurring monopolies like public utilities and when a firm is the only producer of a particular good or service. This single firm or company because the scale of economies is so large that they can supply the entire market at a lower cost than any other competing firm could. Monopolies become a problem when a firm or corporation is the only producer selling a particular good or service, this monopoly wills tend to produce fewer products at a high price. This meanwhile is not productive of a free market. The antitrust laws that are in place today came about from the Sherman Act of 1890. This act was created when the public grew resentfully of the trusts that emerged in the 1870’s and 1880’s. The Sherman Act states that “Every contract, combination in the form of a trust or otherwise, or conspiracy, in restraint of trade or commerce among several states, or with foreign nations is declared to be illegal.” This surprising short sentence is the cornerstone for our antitrust laws today. The Sherman Act basically outlawed restraints of trade, meaning anything that would restrain the flow of free trade. This gave a firm foundation for new and current business to enter into the market place; there would be no fear that they would be pushed out of the market either by price-fixing or collusion. These antitrust laws allowed the normal flow of business to continue. By normal flow of business I mean the law of diminishing returns as well the economies......

Words: 718 - Pages: 3

Premium Essay

Anti-Trust Laws

...Abstract Anti-trust laws were created to stop businesses that are to big from blocking the competition and abusing their power over other businesses. Example 1 Why would the drug maker want to stymie generic competition? Explain. There is one major reason that any pharmaceutical company would attempt to stymie generic competition of any loss of their revenues’. Generic brands of drugs are normally provides the exact same level of benefits just at a much lower cost. The drug makers would defiantly lose millions of dollars by allowing a generic copy of their drug to be sold. The second reason would be the cost of making the drug along with advertising and marketing it as well would cost thousands of dollars. Along with the cost of researching, design, manufacturing, and compliances that goes with the federal regulations. This would mean more money out for the company. They would need to pay for any competition that would hinder any potential success of their product. With all this we also need to consider that the fact of a company’s success would to keep the investors willing to resource their projects, studies and the funding for all those developments. The company wants to make the investors happy so that they wouldn’t lose them, if they don’t maintain a certain level of profitability to keep them happy. Without the investors they would go belly up. What types of legal barriers to market entry exist? When a pharmaceutical has more marketing power they...

Words: 1015 - Pages: 5

Free Essay

Anti Trust Policy in the Modern Economy: Microsoft Anti-Trust Case

...Anti-trust Policy in the Modern Economy Microsoft's Anti-trust Case Mark Hinman UCCS Baud 5590 Anti-trust Policy in the Modern Economy Microsoft's Anti-trust Case This paper's intention is to discuss the role of anti-trust legislation in the modern economy. To accomplish this, we will be reviewing the United States Government's anti-trust case against Microsoft that began nearly twenty-two years ago. To begin we will look at the history leading up to the filing, the government's argument, Microsoft's argument, and the outcome of the case. We will also look at the intent of the Sherman Anti-Trust Act. Specifically, how does the Sherman Anti-Trust Act protect consumers? Finally, we will discuss whether the anti-trust legislation actually accomplishes what it is intended to do, with respect to the technology industry. Microsoft has been under constant scrutiny since June 1990 when the Federal Trade Commission (FTC) launched a probe into the possible collusion between Microsoft and IBM. Three years later, the FTC handed over their investigation to the U.S. Department of Justice. After years of accusations for monopolizing and engaging in anti-competitive acts, Microsoft finally, on May 18, 1998, received a suit for violation of federal anti-trust laws.[i] The suit alleges that Microsoft is in violation of Sections 1 and 2 of the Sherman Anti-Trust Act, and seeks to prohibit Microsoft from selling certain products and engaging in certain......

Words: 2315 - Pages: 10

Premium Essay

Google Anti Trust Laws

...rival shopping. This includes travel and other websites to help protect its ad revenues. The companies coming forth explain that Google isn’t practicing ethically and are only looking to benefit their company only. Google has stepped in and is currently trying to convince the European antitrust investigation to wrap up the antitrust probe (US Department of Justice, 2013). Google has offered to change some of their search pages to give more space to rivals in order to satisfy their concerns and just alleviate the whole issue (US Department of Justice, 2013). To my understanding this ordeal falls under the Sherman Act, which was passed by congress July 2, 1890 (Wikipedia, 2013). The Act provides: "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal (Wikipedia, 2013).” I believe that Google may have engaged in these acts to give them a Higher Market Power in the industry, which would result in them gaining a large Economic Profit. In my opinion monopolies and oligopolies are always considered bad because of their given power. I honestly don’t believe this is true in all cases. Look at Google for example, they are the leading and most popular source engine and outlook many. They do have power, but to obtain their outstanding reputation they try compromise with other companies to reach goals and satisfy both needs. I believe that......

Words: 479 - Pages: 2

Free Essay

Trust

...create their own that they will follow. The five values that I chose were trust, happiness, independence, love/affection, and achievement/ success. After analyzing and trying to decide on one value that means the most to me, I realized that four of the values I chose all play an intricate roll in one value. My achievement and success in my life is very important to me. Without having achievements or accomplishing something that I have set out to do, I would be an extremely miserable and lost soul. I believe everyone was put on this earth to achieve or accomplish something. It is up to the individual whether they are successful. While reflecting on previous years in my life, I noticed that trust, happiness, independence and love/affection have almost deterred my courage to achieve and succeed in certain situations. Trust is the very thing that everybody in this world desires, or at least should desire from one another. Trust is the reason a husband does not question his wife’s whereabouts, because he believes her faithfulness. Trust is the reason a boss does not check behind the work of his employees, because he knows that they will do it to his standards. I believe that trust is faith. When I say that I am placing my faith in somebody, I trust them. Whenever I die, it is one thing that I want to be remembered for. That as a woman, I maintained people’s trust in me. When there is trust in any type of relationship, the parties involved are able to let their......

Words: 864 - Pages: 4

Premium Essay

Anti-Trust Law and Monopoly; Restraint of Trade

...Anti-Trust Law and Monopoly; Restraint of Trade Anti-trust laws encourage competition by “leveling the playing field”. These laws are intended to prevent large companies who have already established themselves from using their size and leverage to prevent competitors from entering their markets. The Sherman Act addresses unfair strategies in two different ways: Section 1 forbids restraint of trade and Section 2 forbids the misuse of monopoly power. Section 1 requires two or more persons conspiring together for a violation, so the essence of the illegal activity is “the act of joining together”. Section 2 refers to “every person”, so the conduct of a single person can result in a violation of Section 2. Any agreement between firms that results in reduced competition in the marketplace is restraint of trade. When there are very few firms in a market and a firm with an extreme amount of market power can affect the market price of its own product that firm has monopoly power. The Sherman Act applies only to restraints that have a significant impact on interstate commerce; it also extends to U.S. nationals abroad. The Clayton Act deals with specific practices not covered by the Sherman Act that reduce competition or lead to monopoly power. However, they only violate the Act if they are found to substantially lessen competition or create monopoly power. The price discrimination section 2 of the Clayton Act makes it illegal to injure buyers through unfair pricing and......

Words: 897 - Pages: 4

Premium Essay

Anti-Trust Laws

...best way to promote consumer well-being. America’s anti-trust laws have been in place for more than 100 years, since the Industrialization of America protecting the consumer’s rights. However, more countries have passed anti-trust laws in the past 20 years. America’s anti-trust laws were passed to focus on anti-competitive practices. Americans have long loved free market system and the competition that it fosters. Competition among businesses has been regulated by anti-trust acts recently; however they help to maintain a fair and equitable system where the small business is able to compete with the big business. The anti-trust laws enable the consumer to purchase a quality product at an affordable price due to the competitive market that it sets in place between the businesses. Anti-trust laws are needed to continually handle the companies that would be dishonest in business practices if not for regulations and rules. This paper will discuss the impact of the anti-trust laws that govern competitive business and how they protect the consumer and business from monopolies, deceptive practices, and prevent predatory lending. Sherman Act The anti-trust laws were created by Congress to protect the consumer and business and to save competition and free market. A recent example of a company that is aggressively acquiring or becoming a cable monopoly is AT & T who is acquiring DirecTV. The first of the anti-trust laws was the Sherman Act in 1890, which outlaws or......

Words: 1174 - Pages: 5

Free Essay

Trust

...   A/B Trusts An A/B Trust is any type of trust that splits into two separate and distinct trusts upon the death of the grantor. One of the separate and distinct trusts is a Credit Shelter Trust, which is designed to hold as much of the grantor's property as is sheltered from the federal estate tax by virtue of the unified credit; i.e., $2,000,000 for decedent's dying in years 2006, 2007, and 2008, and $3,500,000 for decedent's dying in the year 2009. The other separate and distinct trust is a Marital Trust, which is designed to hold the remainder of the decedent's property, which is sheltered from the federal estate tax by virtue of the unlimited marital deduction. These separate and distinct trusts are designed to eliminate or reduce the federal estate tax liability of a married couple over the deaths of both spouses. An A/B Trust arrangement can be created under a living trust or a testamentary trust, since these provisions do not take effect until after the grantor's death. See "Credit Shelter Trusts" and "Marital Trusts." See also "Family Trusts" and "By-Pass Trusts." Back to Table of Contents     Asset Protection Trusts An "Asset Protection Trust" is a type of trust that is designed to protect assets from the claims of creditors. There are two types of Asset Protection Trusts - a Domestic Asset Protection Trust (also known as an "Onshore Trust" or "DAPT") and a Foreign Asset Protection Trust (also known as an "Offshore Trust"). Both types of trusts are also......

Words: 3639 - Pages: 15

Free Essay

Anti Trust and the Consumer

...Anti-Trust Laws and the Consumer Anti-trust laws protect the consumer from unfair and deceptive trade practices. These laws were created to protect business owners, consumers and economic efficiency. In an open and free market, businesses must provide quality products and services to consumers as well as truthful representation of their goods and services. Misrepresentation results in inferior products and artificially inflated prices for the consumer and is at times accomplished through unlawful collusion between competitors. A fair and open market where businesses compete in a non-monopolistic environment brings economic efficiency as businesses are encouraged to find more efficient methods of production stay in the market. Inefficient firms that fail to understand consumer needs, eventually lose in the market. If open market competition was nonexistent, cartels and monopolies would be free to distort the allocation of society’s resources for economic profit in the long run. This would result in economic loss to consumers as well as competitive harm to the economy. In the United States, the basic federal antitrust laws are: The Sherman Act of 1890, the Clayton Act (1914) and the Federal Trade Commission Act of 1914. The Sherman Act prohibits the restraint of trade and the creation of monopolies and is an important part of economic legislation in the United States. The Sherman Act prohibits any agreement among competitors to fix prices, rig bids or engage in......

Words: 3108 - Pages: 13

Premium Essay

Claim

...Claims PRO team 1 Abortions The social media are talking more about abortions. They believe that it’s a decision that should not be argued why women would want an abortion. With the evolving moral standards of society, abortions are becoming more and more justified. Abortions, the practice of removing a fertilized egg from a mother has become a controversial issue in American society, but should be generally supported because you don’t know exactly why women want an abortion or what happened to where she cannot conceive this baby. Abortion advocates must think the American people are fools. They claim the issue is not the morality of abortion, but "who decides--the woman or the state? “Most Americans favor stiff penalties for rapists. Clearly, laws against rape don't let the government decide who gets raped. Instead, these laws indicate that the government has decided rape is an unacceptable practice. Rapists disagree, but the rest of us decided to impose our morality on them. That is what laws are all about. I do not agree that getting an abortion is wrong. Those who refute abortion claim that it is the murder of a helpless baby who has not yet had the chance to live and function as a human being. However, the debate opposite it is just as fervent: it is a woman’s right to choose what happens to her body, and if she decides that she is not capable of bringing a child into this world, than she shouldn’t be forced to out of nature. Where do we draw the line between humane...

Words: 298 - Pages: 2

Free Essay

Anti-Trust Claims

...Antitrust Claims Antitrust represents an uneasy compromise between laissez faire and interventionist visions of public policy. It recognizes the need for governmental involvement in the economy beyond the protection of property rights; yet it rejects overt control of market outcomes. The appropriate degree of governmental involvement for antitrust policy remains a contentious issue. Laissez faire and interventionist economic theories have competed for influence in antitrust decision making ever since the enactment of the Sherman Act of 1890. Antitrust laws were adopted by Congress to outlaw or restrict business practices considered to be monopolizing or which restrain interstate commerce. The Sherman Antitrust Act of 1890 declared every contract, combination or conspiracy in restraint of trade or commerce between states of foreign countries to be illegal. Clayton Antitrust Act of 1914, was amended by the Robinson-Patman Act of 1936, prohibits discrimination among customers through pricing and disallows mergers, acquisitions or takeovers of one firm by another if the effect will substantially lessen competition. The Antitrust Division of the United States Department of Justice enforces for the federal government, but private lawsuits to halt antitrust activities have become popular, particularly since attorneys fees are awarded to the winning party. This act is seen to be a legal specialty that has kept a few industries honest. The world’s largest media company and......

Words: 590 - Pages: 3

Free Essay

Anti-Trust Laws

...be challenged or threatened by any other company with in that industry. If the court had not initiated that ruling then Microsoft would be able to set prices where ever they liked. Without fear of them losing a large portion of their consumer base ("Excerpts From the Ruling That Microsoft Violated Antitrust Law," 2000). One major Clayton antitrust act case was the 1974 AT&T case. An Attorney General by the name of William Saxbe filed for a case against AT&T (Reed, 2007). He filed this suit because AT&T had been allowed to have a natural monopoly by the government of the United States since their existence (Reed, 2007). The Department of Justice particularly pursued this case because they felt AT&T was in fact engaging in anti-competitive behavior (Reed, 2007). In the phone industry AT&T controlled a very large portion of the marketplace. Which created unnatural barriers to entry into the market place. The settlement that AT&T came to with the United States government allowed them to keep their long distance services. It also split up some their other in house companies into smaller companies that would not be controlled by AT&T (Blanch, 2015). That took AT&T away from twenty-two of their local monopolies (Blanch, 2015). This brought down the price of phone services across the nation. It allowed other companies to be able to enter into the market place. With the entry of additional companies into the market place it gives consumers more......

Words: 2079 - Pages: 9

Premium Essay

Anti-Fraud

...The IUCN Anti-Fraud Policy February 2008 – Version 1.0 Office of the Director General The World Conservation Union Rue Mauverney 28 1196 Gland, Switzerland Tel: +41 22 999 0296 Fax: +41 22 999 0029 www.iucn.org Policy Version Control and Document History: The IUCN Anti-Fraud Policy Title Version Source language Published in French under the title Published in Spanish under the title Responsible Unit Developed by Subject (Taxonomy) Date approved Approved by Applicable to Purpose IUCN Anti – Fraud Policy 1.0 released February 2008 English Politique de l’UICN de lutte contre la fraude Política para la Prevención de Fraudes de la UICN Office of the Director General IUCN Oversight Unit Fraud, Internal Control, Risk Management November 2007 Director General and Global Management Team All IUCN Staff Members world-wide The aim of the IUCN Anti-Fraud Policy is to safeguard the reputation and financial viability of IUCN through improved management of fraud risk. It sets out explicit steps to be taken in response to reported or suspected fraud, as well as measures that will be taken to prevent or minimize the risk of fraud. IUCN Internal Control Policy Framework COSO Standards IUCN Code of Conduct and Professional Ethics for the Secretariat Sent to all staff members world-wide, available on the IUCN Knowledge Network (intranet), provided for information to all partner organizations and suppliers with contracts with IUCN, and available publicly on request. Is part of......

Words: 7003 - Pages: 29

Free Essay

Wills, Trusts

...Wills, Trusts and Estate Planning Everyday many loved ones die without a Will in place and as a result, their affairs are left in limbo. Without a valid Will in place, your loved ones will be left to pick up the pieces, pay the unpaid bills and correspond and possibly litigate with creditors. There is a common misconception that a Will can or should only be created later in life. However, if you have assets eg. a house, savings, or a business, and people or others you would like to look after, you must consider making a will no matter your age. Thinking, talking & planning for death may feel uncomfortable. However, if you died or became incapacitated, through illness, accident, old age or emergency without sorting your affairs, this could wreak havoc on those you’ve left behind. Like Wills, another widely misunderstood concept is that of trusts. Trusts are often seen as something only the rich need to be concerned with. A trust is created when assets (which can include property, cash, shares etc) are transferred by a person (the settlor) to one or more persons (the trustees) with instructions that they are held for the benefit of others (the beneficiaries). A trust may be set up during a person’s lifetime and have immediate effect, in which case it is usually evidenced by a formal trust deed and commonly referred to as a settlement. Trusts play a key role in everyday life and can provide to be extremely useful depending on the intentions of the Settlor. A...

Words: 408 - Pages: 2

Free Essay

Anti Trust Laws

...competitors in similar businesses (Ftc Guide To Antitrust Laws, 2008). With the current health care debate issues concerning anti trust laws are also an issue for concern. A major facet of President Obama’s health care reform is for those within the health care community from providers to drug companies to commit on some level to keeping down cost. According to the New York Times, “Any agreement among competitors with regard to prices or price increases — even if they set a maximum — would raise legal concerns” (Pear, 2006) Anti-trust laws are imperative to keep the market competitive regardless of the type of business one runs. However, especially in terms of medical care it is important that issues, such as price gouging do not take place because of the large number of people who struggle with health care cost. Unfair business practices are always a point within business constantly under monitoring and creating changes because of said monitoring. Health care is essential to the everyday lives of the American people, from those who can afford to pay cash for their medical services to those who use public assistance, and everyone in between. If any area of business needs to stay abreast of issues concerning anti trust laws and monopoly health care is number one because of the domino effect health care can have on the economy (Jost, 2009). Another aspect of anti trust laws is the ability to keep the market competitive. In the instance of health care, the competitive nature......

Words: 1043 - Pages: 5

TV Shows | Wie weit gehen? | Dante's Inferno How the Punishment Fits the Crime Essays