Is Microsoft a monopoly Essay Example for Free

Is Microsoft a monopoly Essay In order to understand if Microsoft is a monopoly one must first know the definition of a monopoly. A monopoly is a firm that is the sole seller of a product that has little or no substitutes. This automatically should arouse many thoughts in the minds of â€Å"us† as consumers. For all these years have we been monopolized by a producer of a product just because there were limited sources in the same fields? Yes and no should be the floating answer. Microsoft for years has been the producer of almost every necessary component associated with our electrical devices. Microsoft is the developer of multiple operating systems or OS that first entered the market in 1981 but did not officially appear until 1984. In 1984, the Applesoft Basic for Apple Computers was introduced by Bill Gates. Due to the fact that the Apple system was first in this technologically advanced field it was set in the direction of being a monopoly. This is the evident sign that lack of other operating systems would set both Bill Gates and Microsoft in a monopolistic state. So if this monopolistic sign was so evident then why wasn’t it stopped by the government? This is a direct form of a government-created monopoly. Government-created monopolies exist because of patents and copyrights. The government has allowed Microsoft to exist because it was seen to be within the best interest of the public. The government does not actually predict whether a producer or firm will be a monopolist, it only allows a firm or producer to own the rights to the specific fields that they want to create. The communications field often has their own set of economical rules which is commonly set at the understanding that every must benefit from the product. Microsoft has often perfected this with their operating systems by staying consistently up to date with the consumer’s way of life. So what exactly allowed Microsoft to become a monopoly? Microsoft (Bill Gates, Steve Ballmer, and Tim Patterson) would create and enforce universal data interaction standards for computer systems. The timing for this was perfect because businesses were in a technological era that the computer was in necessary and high demand. Microsoft became one of the largest monopolies because of their ability to be in almost every market that had use of a computer system. This was a great thing for Microsoft and for users but it was also a bad thing for users as well. Since the market was so unregulated it would allow Microsoft to not produce a quality product. This was allowed because of their monopoly. This monopoly would be out of the control of the government because breaking up the Microsoft Company into little companies would only cause damage to the consumer. In this I mean you the consumer would have to purchase multiple operating systems in order to maintain computer interacting standards. This would not be the best interest of either the government or the consumer. So unfortunately this monopoly would be allowed to carry on its position in the computer operating fields. Just think by chance that the government did break this monopolistic company up? This would allow so many small companies to produce the same product under the same outdated set of rules. So question, if the same set of bendable rules applied what would stop those small broken up companies from becoming a monopoly as well? Exactly nothing. So the government sees it better for consumers to have to deal with one monopoly compared to multiple. A company like Microsoft falls into a classification of a large monopoly. There are many smaller monopolies that go unnoticed. Some of these companies are Nike, Reebok, New Balance, etc. You may hear about some of these companies monopolistic traits, but choose not to pay much attention because they are not as large as a company as Microsoft. Let’s face it we tend to have a thought that they are just brands. Just a thought, when you walk into your local retail store are you looking for a pair of shoes or a certain style of shoe by name (i. e.Nike Jordan’s, Converse All-Stars or commonly known as â€Å"chuck taylors†, Reebok Zigtechs, New Balance 855’s)? These are the monopolies we do not pay much attention too because they are mainly companies that are in deep competition with one another. In order to compete in their respective fields the company must make a shoe or an article of clothing that is unique whether it carries a label or not. So what exactly makes Microsoft a monopoly instead of a competitive market? Since Microsoft is the only producer in the operating system market it has the ability to set and stay with its own price. Microsoft in recent years have gained a few other competitors that are making their way up the ladder with free trial periods or just general free use with things like email, search engines, and even software purchases through computer brands, printers, etc. A common name that we all use on practically a daily basis is Google. Google Inc. has won a growing number of customers for its Google Apps software, a collection of word processing, email, spreadsheet and other tools that are hosted and accessed online. The company is also reportedly preparing an expansion of its solutions marketplace, to sell software to businesses that can augment Apps. When confronted with questions of their products, an all too modest Google made no response. Unlike Microsoft, Google tends to not make broad promises of software updates until they have perfected the process. This is what commonly makes Google a most used search engine. Google also offers Gmail which carries its own form of complete virus software which sets it in a field of its own unlike Yahoo mail that only offers a low version of spyware with a premium account purchase. Other competitive companies that are climbing on the Microsoft ladder are Oracle Corp. and LotusLive iNotes. When Microsoft was confronted if any of these companies were the reason behind the downed sales of their â€Å"Microsoft Office† version they replied with it is unclear if they had a hand in the matter. This is another â€Å"big headed† response because Microsoft does not want to even think at this time that they could possibly have competition. When a monopolistic company is confronted with competition you will usually see a drop in product prices that may or may not go unnoticed. It is my opinion that this competitive edge brought to Microsoft will not go unnoticed. With the growing state of these other companies, I cannot wait until Microsoft has to become a competitive market instead of a monopoly. Another way to tell whether a company is a monopoly or not, is to follow its revenue. Since a company like Microsoft does not have their â€Å"books† out their like public records, we have to follow media theories and articles. When you see an increase in the company revenue this means that their output has went up. This means that they are producing more and making more because the demand has gotten higher. When revenue has dropped then the company has lost money and no longer producing because the demand has dropped. All too commonly you may see a drop in price because the company is wanting to sell their items rather than taking a complete loss on them. The will also set their prices above marginal cost. This will tend to be a seasonal thing because annually they try to place newer products on the market. Now noticing that other companies like Windows, Macintosh, and Linux are in competition with Microsoft is a huge deal to us as the consumer. To Microsoft this is no real big threat because of the huge market share that they own. This allows a monopolistic company to carry on their threat of being the â€Å"big man† on the block. In this I mean that they are allowed to place what seems to be ridiculous price because they do not see the competition as a true competitor. Consumers frequently take notice to this when they are in the market for the produced good of computer systems. Consumers commonly watch for the better deals while taking â€Å"name brand† and â€Å"off brand† into high consideration. Even though Sony may be the better brand, it is possible that Acer could sell more because of the consumers desire to pay less and receive more. This is just the way that things go in a time of economic struggle. The only time that things like this change is if the consumer has a specific desire for a certain brand over the lesser price. So as a monopoly could Microsoft force these other competitive companies out of their market? Yes they could and it has been accused that they have in the past. To include the list of companies that Microsoft has bought out in order to maintain at the top would be completely ridiculous but to name a few would be ok. Microsoft has purchased companies like Skype, Nokia, and of course we all heard of the Microsoft-Apple buy out in order to stop them from sinking. There is a lot of talk about what should be done to the Microsoft Company with the Department of Justice, Attorney General’s, and Microsoft. Many think that breaking the company up would be a mistake while a majority agree that it would also make them list a fairer price and focus on a better product. This in my opinion is not to the judgment of anyone. Is Microsoft wrong for being the best in their business? In my opinion, absolutely not. It is at the decision of the other competitive companies whether to stay in or back out. Many people think that the treatment they receive while purchasing items from the producer is unfair. I would like to disagree because if you need the item bad enough then whatever dollar amount the producer places is the dollar amount the consumer will pay. Take gas for instance, when gas was hitting its record highs two years ago. All I heard were complaints of how ridiculous it was, we should petition, protest, or even not purchase for days. Where were their complaints when they were driving to McDonalds to get a burger instead of cooking at home? People only complain about the abuse that they cannot control. This is the same with items like the personal computer. Everyone wants to complain about the price they paid for their computer but not the eBay items they are purchasing while they use that same computer. This reminds me of a conversation between the course instructor and myself. He asked one time if there was a sale on hamburger at the store but you really wanted steak which would you choose? I replied with I am going to choose steak because it is what I want. I chose this answer because regardless of the price of hamburger if I want steak, then ultimately steak is what I will get. This is my choice. I choose to not complain about the items that I cannot control because at the end of the day I still need it. So in conclusion, if you ask me if Microsoft is a monopoly or not, my answer will still remain yes and no. Yes, because they are the primary holders of operating systems and they are getting filthy rich. No, because they have made themselves the best. If the other companies want to be on top then they need to fight to be on top. But also in the mean time they shouldn’t complain about the actions that Microsoft takes in order to remain the best. References Mankiw, N. G. (2012, 2009). Principles of Microeconomics (Sixth ed. ). Mason, OH: South-Western Cengage Learning. Mankiw (2012, 2009) Fisher, G. A. (2000, May 30). Why is Microsoft a Monopoly? Retrieved May 21, 2012, from http://www. zaimoni. com/George/MicrosoftMonopoly. htmFisher (2000) South-Western College Publishing (2003). Is Microsoft a Monopoly? Retrieved May 21, 2012, from http://www.swcollege. com/bef/policy_debates/microsoft. htmlSouth-Western College Publishing (2003) ThisNation. com (2008). Is Microsoft a monopoly? If so, why does it matter? Retrieved May 21, 2012, from http://www. thisnation. com/questions/027. htmlThisNation. com (2008) Albro, E. N. (2007). Eight Years Later, Is Microsoft Still a Monopoly? Retrieved May 21, 2012, from http://www. pcworld. com/printable/article/id,139458/printable. htmlAlbro (2007) Jackson, E. Forbes (2012, March 1). Steve Jobs Used Patents to Get Bill Gates to Make 1997 Investment in Apple. Retrieved May 21, 2012, from.