econ paper 2

econ paper 2 - Ravi Desai Economics 3535 5/7/2008 1. The...

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Ravi Desai Economics 3535 5/12/2009 1. The United States v. Microsoft case was combination of civil actions filed against Microsoft by the Department of Justice and twenty states. Microsoft was accused of abusing monopoly power in its treatment of its operating system and web browser sales. The issue at question was whether Microsoft was allowed to package its web browser software with its operating system which allegedly permitted Microsoft to be the victor in the browser wars. Underlying issues included queries over whether the software giant had manipulated its application programming interfaces to favor IE over third party web browsers. Microsoft defended its actions by stating that the bundling of software was the result of innovation and competition, that the two had become the same product and were intricately linked together, and that consumers were receiving benefits of IE for free. It was also found however, that Microsoft forced computer makers to include IE by threatening to revoke their license to distribute Windows. The court’s finding of fact stated that Microsoft’s dominance of the personal computer operating systems market established a monopoly, and that Microsoft had taken actions to disable any threats to the monopoly. A two-ruling concluded that Microsoft had committed monopolization, attempted monopolization, and violated Sections 1 and 2 of the Sherman Act. The judge’s remedy was that Microsoft must be broken into two separate units, one to produce the operating system, and one to produce other software components. Microsoft appealed the findings of fact and the D.C. Circuit Court of Appeals overturned the judge’s rulings against Microsoft. The reasoning behind this was because the Appellate court had adopted a “drastically altered scope of liability” under which the
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This note was uploaded on 05/05/2008 for the course ECON 3535 taught by Professor Blackstone during the Spring '08 term at Temple.

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econ paper 2 - Ravi Desai Economics 3535 5/7/2008 1. The...

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