Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

Exercise 17

By the end of 1995, Netscape's share of the browser market grew to 90 percent by continually upgrading its product to include new features such as e-mail and video capabilities. Shortly thereafter, Microsoft introduced and distributed a new version of its operating system that included its Internet Explorer browser at no cost. In addition, Microsoft allegedly imposed several restrictions on original equipment manufacturers (OEMs), Internet service providers (ISPs), and Internet content providers (ICPs) with the intention of (a) ensuring that almost every new computer had a version of Internet Explorer (IE) and (b) making it more difficult for consumers to get Netscape on new computers. On May 18, 1998, the government filed a complaint in District Court against Microsoft. Based on what you have learned in this chapter, briefly discuss the merits (if any) of the government's complaint against Microsoft.