Ethics Big Case 2
Microsoft Manages Legal and Ethical Issues
Microsoft has a blinding reputation and presentation with the public and its users. They investment in the communities, the youth and globally. Not only the company invests but the employees contribute. As Always Bill Gates take it to the top with the William and Melinda Gates Foundation. Microsoft’s efforts and dedication is admirable. Its support of start-up software companies, creates a unique composition of company characteristics, that somewhat contradict their actions within the competitive business world. Antitrust issues should be Microsoft’s middle names. From the early 90’s till now Microsoft has been involved in number antitrust issues, anti-competitive activities, and monopolist tactics. During all of the investigations Microsoft is not very willing to provide information. They are very combative and they have a swindling tactic. Despite all of Microsoft’s misconduct in the business world they are still thriving, expanding and innovating. Questions:
1.) The unique aspects of the software industry that allowed Microsoft to actively become a monopoly and be involved in anticompetitive practices are the abilities to bundle, the size and abilities of the competing companies along with Microsoft inability to share. The very first investigations (reported in the text) was Microsoft selling to OEMs and at 60% discount as long as they paid Microsoft per processor not per copy. So every computer that the OEMs sold they paid Microsoft instead of every computer that had Microsoft installed on it. This concept was double charging the consumer even if they opted for a different operating system, they were still paying Microsoft. Also any OEM could accept the offer of 60%, this cost being unbeatable economically, and squashes out the competition because who would pay full price? In October of 1997 Microsoft was faced again with a violations of previous court decisions involving the bundling of Microsoft and Internet Explorer web browser. Windows bundled Windows 95 with internet explored stating that it was “integral, inseparable part of Windows 95” they said this was not done to disadvantage anyone (Netscape). The district Court issued an injunction the no longer allowed Windows to bundle. Windows complied and sold Windows 95 without internet explorer which resulted in software failure, which Microsoft knew would happen, this resulted in Microsoft being held in contempt and their stock price falling. Microsoft had to publish and up to date version that allow Windows 95 to work without Internet Explorer. These two cases were the start of a repetitive future for Microsoft that has led to the request to split Microsoft into two companies due to their consistent bullying and predatory pricing of companies such as Netscape and Apple. 2.) Microsoft’s leadership and corporate culture are solely responsible for their ethical and legal issues. Every decision and direction the company acts on is fathered by the corporate leadership. Many of the cases explained in the case involve the CEO or legal team negotiating a deal, not sharing information, proposing illegally splitting the market. Their choices lead the company.
Even Jim Allchin “Microsoft’s Lord of Windows” couldn’t completely defend Microsoft’s product in the 1998-1999 trial. Their choices in every investigation and trail where never positive for the company. 3.) After reading this case their philanthropic activities seem to overshadow the wrong doing in the business community. Much of the litigation happened before I was old enough to even care about the news or what a computer company was doing. I’ve never heard anything negative about Microsoft. After reading what they have done that’s been published in the text. It appears the philanthropic actions are a cover up. If they do enough good the bad and ugly will fade away, which that theory seems to be working. Microsoft has overcome a lot of their legal mishaps and their reputation at least to my generation is very good.