ECON312 HW Essay
Submitted By Lamiya091394
Words: 508
Pages: 3
Antitrust Practice and Market Power
Lamiya Marsh
DeVry University: ECON 312
Professor Tucker
Antitrust is a law that prevents anticompetitive behavior between firms. November of 1999, Microsoft was investigated for conducting antitrust behavior. Microsoft tried to form a monopoly in which they would gain control over the software industry. Their strategy was to implement their current market power and use their profits to shut down any other company that showed or could show a potential threat to Microsoft. There then was a trail where firms such as IBM, Intel, and Apple testified against Microsoft due to the fact that evidence was sought against them. There were emails and memos from Microsoft detailing their plan for taking over other firms and making sure Microsoft continued to stay successful. Some of the cost that pertain to antitrust behavior are frequent price fixing and boycotting which is the effect of unfair trading. To go in depth with price fixing, it basically means you cannot agree on a certain price with your competitors, so for example. Walmart cannot have the same prices as Target there has to be some price difference. Also, under the antitrust law, competitors cannot agree on territories, for example Best Buy cannot tell RadioShack where to sell their products to or vice versa. In the case of Microsoft, the company violated section one of the Sherman Act, because Microsoft conducted marketing strategies with other firms and was sought as unlawful. Monopolies affect the market in a negative way, it causes price fixing and a high demand for products but not enough supply. Also, after conducting further research it leaves consumers “stuck” in a sense, consumers do not have the freedom of choosing something as simple as computer software because firms want to monopolize the market and choose what they think is best for us therefore limiting consumers into buying that one particular product. An example of how monopoly could work in the markets favor is if there was a significant increase
