Antitrust Practices and Market Power Essay Example | Topics and Well Written Essays - 500 words - 2

Antitrust Practices and Market Power - Essay Example By pairing the two together, every Windows user had a copy of the internet explorer which led to Microsoft’s victory in the market. It was clear that bundling them together had restricted the access for other browsers in the market that had to be bought. It is alleged that Microsoft used its monopoly power to favor the internet explorer over the other web browsers. In its defense, Microsoft said that merging its operating system and the Internet Explorer was as a result of fair competition and invention, and that would enable users to use the internet explorer for free. It was still clear whether the operating system and the Internet Explorer were two separate items or whether they were one piece. However, Microsoft maintained that it had made its operating system a bit more expensive, and thus it could not be said to be y free. The case focused on predatory strategies Microsoft had engaged in and a market barrier to entry as opposed to interoperability (Brinkley, 2000). The action by Microsoft to favor internet explorer over the rest of the browsers in the market violated the Sherman antitrust law section 1and 2 where Section one states that any contract that would cause restraint in trade among several states and thus the contract could be declared illegal. Section two, on the other hand, states that any company that will attempt to monopoli ze any part of trade shall be declared guilty of a felony punishable in a court of law (St.Olaf College, 2004). A monopoly is a company that has only one seller in the market who has absolute rights in a particular interest, and they are te only seller in the market thus have the right to fix the price. In most cases, the cost of entering into the market is very high thus causing a barrier to entry to new entrants. The monopoly fixes the price as consumers will still buy. There are monopolies owned by the government especially where the