The United States Vs Microsoft And The Ethics Behind It

Microsoft has been one of the leading pioneers in the computer technology and software industry. Microsoft has grown to become one of the largest technology companies alongside Apple, and International Business Machines (IBM) in the United States (U.S.). Society forgets that just because a company grows big and becomes highly successful, it does not mean that said company does not have its fair share of problems. With all the economic successes that Microsoft has experienced, society overlooks the one big infraction that Microsoft committed which led to legal action taken by the United States Government. However, with the legal action taken against them, money, and persistence Microsoft was able to get through continue to do business today.

Microsoft is a computer software company that was created in 1975, when a man named Bill Gates and his friend Paul Allen converted an old mainframe called Basic to be used on a personal computer (PC). The software company took off and grew into the company that it is today. Not only did Microsoft create an Operating System (OS) called Microsoft Disc Operating System (MS-DOS), which according to Encyclopedia Britannica.com, “MS-DOS sold over one hundred million copies” (Encyclopedia Britannica, 2017, para. 2), but it also was able to defeat all competing operating systems, such as Control Program/Monitor (CP/M), and IBM Operation System-2 (OS/2). Microsoft’s high market sales showed other companies that they were a force to be reckoned with allowing them to start planning future developments. Microsoft focused on an even better OS for the personal computer market, even though the company was only created five years prior.

Microsoft became interested in the worldwide web and wanted to join the Internet Brower field, and created Internet Explorer. Before 1993 people could not search the internet as easily as they can today. This was due to the lack of easy access that web browsers provided on any computer at that time. In 1990 a new OS was developed called Windows which soon became popular and they started bundling with a browser called Internet Explorer. According to Encyclopedia Britannica, Microsoft “sold about 1 million copies a month, while being in about 90% of the world’s PCs” (Encyclopedia Britannica, 2017, para. 2). In 1993 a company named Netscape created the most popular internet search engine called Navigator. This allowed the company to corner about 90% of the market and was later bought by a company called America Online (AOL). This was Window biggest competition and as it became Microsoft’s most popular OS, the world wide web started to develop and become more popular and was being included in most all computers around the world. This paved the way in creating one of the most famous ethical dilemmas in the technological field (Calore, 2009; Encyclopedia Britannica, 2007).

Being the underdog at the time, with only five years of existence Microsoft developed an aggressive strategy when trying to sell and advertise their OS and internet browser. They paid and sometimes forced other computer companies to exclusively put Windows browser on the new PCs that were being shipped out, while also making it difficult to install other competitor’s browsers on the new PC if they preferred another brand. According to Alex Fitzpatrick, who is a writer for time magazine states, “Microsoft packaged its Internet Explorer web browser with its Windows operating systems, which gave Microsoft an incredible advantage over rivals like Netscape in an era when dial-up Internet meant that downloading and installing alternative web browsers was a slog at best” (Fitzpatrick, 2014, para. 1). These actions caused Microsoft to monopolize the technological industry. While also beating its biggest competitors Netscape, and crushing any new competitors that were just starting out. Michael Calore, who works for wired.com states that, “the browser issue sparked a federal antitrust suit against Microsoft in 1998” (Calore, 2009, para. 8). This action, along with the accusations that one could not uninstall Internet Explorer and install a different browser and forcing computer manufacturers to only use Internet Explorer insured Microsoft and the court system would need to figure out how to solve this ethical dilemma. This almost split apart the company, and would have hurt the stakeholders involved (Calore, 2009).

There were a few ethical issues that led up to the court case. The first ethical issue was the monopolistic practice that Microsoft was using. Wired.com states that “Microsoft was abusing its market power to thwart competition, this included Netscape” (wired.com, 2002). By taking up most of the market they could restrict businesses from competing in the market place, no matter how unethical. This action would be unethical due to Microsoft using this monopolistic practice to suppress the companies who wanted to enter the market, just so they can make money and control the market in the process.

The final ethical issue that Microsoft had to deal with was the intimidation of other companies. This provided an ethical problem because everyone has the right to choose, so when Microsoft intimidated computer companies to only carry Internet Explorer, and made sure that was the only browser that was being carried, Microsoft was committing an unethical practice in the process. There were a few different factors that led up to the creation of this ethical crisis. First, according to guardian.com, “Windows didn’t have a TCP/IP stack i.e. a way of connecting to the internet” (Naughton, 2015, para. 3). This action did not go over well with many of the consumers, because they wanted to have access too the growing internet and access the databases necessary online. Even when Microsoft incorporated the TCP/IP stack to windows, this did not stop the problem at all.

The second factor that contributed to the ethical dilemma was the creation of Netscape and its browser called Navigator. This browser made it much easier to access the internet. The guardian also goes on to talk about how, “the browser would eventually become the only piece of software that computer users really needed – thereby relegating the operating system to a mere life-support system for the browser” (Naughton, 2015, para. 4). At the time this would have meant that all the work that Microsoft did to create the windows operating system would be for naught, as it would be just a secondary role to supporting the browser that Netscape created.

This action in particular caused the creation of Microsoft Internet Explorer. The final factor that led up to the ethical crisis was the incorporation of Internet Explorer into the Windows operating system. This action is not necessarily bad currently, but at the time this action is one of the reasons for the law suit. By only incorporating Internet explorer as the default browser, many people did not feel the need to use any other browser. Those people who wanted to switch browsers then would have to go through excruciatingly long wait times, as downloading megabytes was measured in minutes instead of seconds that we are used to today.

Soon Microsoft took over about 95 percent of the market with Internet Explorer, which caused many of the competitors to become basically nonexistent. This was another main reason that Microsoft was taken to court.

On May 18, 1998, the Lawsuit of U.S. vs Microsoft began with the Department of Justice Filing antitrust charges against Microsoft. To begin with, antitrust laws prohibit business practices that restrain trade (Investopedia, 2019). An example would be price fixing or corporate mergers creating a monopoly. Originally the court was charging Microsoft with being a monopoly, but due to other competitors out there like Macintosh, the court ruled that Microsoft could only be a non- coercive monopoly at best because people had the choice of what operation system they could run. The second part of the accusations was that Microsoft made it difficult for consumers to run competing software on windows computers. An example of this would be internet explorer which at the time could not be replace with another browser. This was also one of the main factors of the case. Through out the case, the media also took advantage from what was going on. They took the information and relayed it to the public. They talked about the monopolistic practices that were being practiced, while also the stories of how Microsoft intimidated PC companies to only use windows software, with Internet explorer. These actions helped motivate consumers and other business that had been mistreated by Microsoft in the past, to appeal to the government under the antitrust law .

After about 8 months, The District court ruled against Microsoft and enacted that the company must split into 2 separate companies. One of the companies would have the operating system while the other would have the software. Microsoft then appealed the ruling and the courts repealed it in favor of the World’s most expensive fine at the time of 750 million dollars

The ethics behind what Microsoft was handed horribly overall, cost them a lot of money, and nearly got the company split into two different companies. This was due to the Monopolistic practices and the forcing of other companies to only carry their products. There were a few good things to come out of this case though. Microsoft became the first company to implement their browser into the OS, and Internet Explorer became the most popular browser for a while and was the staple of being the basic browser that came with all new PCs, and future game systems and tablets. Microsoft needs to take to take what they have learned from and before this landmark case and make better and more ethical decisions. With these thoughts in mind, Microsoft will continue to be one of the leading technological brands, while lasting long into the future.