St. Joseph’s Prepratory
Philadelphia, PA

Teacher: Mr. William Connors

“Sherman Antitrust Act: Government Regulation on Microsoft”

Jim Brent

11^th Grade

            Government regulation is a must have when companies act as monopolies.  If big companies owned everything then this nation could never claim to be the land of opportunity.  In the Microsoft case, government regulation was used well and proved that even a billion-dollar industry cannot elude the government.  If big companies own everything then they have full control over the market and product prices.  The Sherman Antitrust Act regulates companies that transfer shares to a set of trustees in exchange for a specified share of consolidated earnings of jointly managed companies and makes anticompetitive practices illegal.  Microsoft was brought to court because the company packaged the operating system, Windows, and the internet browser, Internet Explorer, already installed on the computer.  When the company did this, consumers had a very difficult and costly time trying to use another operating system or internet browser.  The court finally found Microsoft guilty of holding a monopoly and told Microsoft to split into two companies and change their ways of packaging.

            This case has legitimate rulings because even though Microsoft never hurt the consumer directly, they did hurt the consumer indirectly.  Microsoft used its wealth to get rid of competition that might bring up new technology or show up Microsoft in their own market.

When Microsoft stopped other companies with technological innovations they did not allow the consumer to benefit from new products.  Another legitimate ruling is for Microsoft to stop their ways of packaging operating systems.  This way consumers will have a full view of operating systems to choose from and not be stuck with what Microsoft pre-loads on the computers.  The ruling against Microsoft was also legitimate because what Microsoft did to the internet server, Netscape, was very anticompetitive.  By packaging Internet Explorer and making it impossible for consumers to delete the program, it was hardly worth using other internet browsers like Netscape.  If a company like Netscape has no operating system it is impossible to compete with Internet Explorer.  Usually when a company is on the top of an industry for 19 year and shows a limited amount of competition something can be suspected.

            One unnecessary rulings of the Microsoft case was to split the company into two.  This won’t make competition any easier because now there will be two, powerful, billion dollar companies owned by the same person. The ruling is also unnecessary because the majority of consumers did not feel threatened.  There were still other companies and prices among computers were still competitive.  Even 77% of the people were not against Microsoft.  The ruling against Microsoft could also be seen as unnecessary because Microsoft holds a good portion of the market.  Ruling against them could hurt the economy since Microsoft is so wealthy.

            The Sherman Antitrust Act saves the consumer money in the long run by making sure people have options in companies to choose from and are not overcharged by a single company.  If the government did not have regulations then wealthy companies could run everything and costs of products would probably significantly rise for all consumers.  Even though the consumer may have to pay for inspections and budgets it gives the consumer the opportunity to start their own company and not be forced out of business quickly by unfair competition.

            Consumers should be the decision makers in over-regulation.  When the people of the United States feel that no one is getting a fair opportunity because government regulations are impeding companies from having any growth or power then there is a problem.  Since the people are the center piece in our nation they should be able to constitute when the government is pressing hard down on an industry.  The decision should always be brought to court to decide if the government is regulating too closely and not letting the market grow naturally or letting companies break through.  The court should notice when a company is growing naturally because consumers are happy with the products.  A court should be able to tell when a company like Microsoft is using harmful packaging techniques to crush competition.  In general, when the consumer feels that government regulation is being too strict, the people should be able to have a say.  Especially since it is the consumers’ money that funds the government regulation and supports the companies.

            There is just the right amount of government regulation today.  Some proof of this is that there are still millions of competitors in all different ranges of the business and marketing world.  The government has to be doing a good job if there are still enough competitors to satisfy the people of the United States, and there are no big monopoly businesses that are overpricing products and getting away with it.  The government stepped into the Microsoft case at the right time.  Just as businesses were dying out and Microsoft gained 90% of the operating system market the government noticed that some monopolistic practices must have been happening, and they were correct.  Secondly, the government is regulating just enough because it still can exercise power when billion dollar companies.  Even though Microsoft is extremely wealthy, they could not find a way around government regulations.  A good sign that government is regulating enough is that the consumers do not feel threatened by big companies and have many competitors to chose from.  Consumers also do not feel threatened by too much regulation or feel that the government is pressing down too hard on businesses or not letting them have any power.  Some final proof that government is regulating just enough is that prices all over the United States are still competitive.  This means that there still has to be companies all over that are competing with each other to win over the consumer.  When prices are reasonable and low that usually means companies are competing and government regulation is doing its job.

            In today’s world, government regulation on monopolies is a must have.  Without the Sherman Antitrust Act consumers would be forking out twice as much money to big monopolies.  Businesses have to be controlled and have to have limits set upon them.  If big companies owned everything this nation would not be the land of opportunity.  Competition is a must for growth of better products and the growth of out nation. The Sherman Antitrust Act allows competition to take place and is needed to better our country.