A monopoly is a market situation in which there is only one industry or company that that provides a particular product or service. These monopolies are mostly characterized by the lack of competition for the services or the goods that they produce. There are barriers to entry for any potential competitor in the market. In a monopoly, there is one company or business that dominated the area and squeezes all the competition and the consumers have no choice and all its products have a high price and they make high prices.
Antitrust violations are the intentions that are meant to cause an increase in the price that consumers pay for products; they harm and hurt competition and can also harm and damage the economy. Antitrust laws are put in place to ensure that competition in the marketplace is protected since it is considered as being beneficial since it saves the consumers from paying more for commodities and also in encouraging businesses to make and produce better products (Bork, 1993).
Monopoly is used to describe some companies like Microsoft and Google which in many cases they do not face any market competition and they have command over a big market share and they also use their big sizes to compete in many ways which in many occasions are termed as unfair like the dumping of their products at a low cost in order to cause harm to their competitors, by trying to tie arrangements in between their various products, and many other practices that are usually regulated under the Antitrust law.
How Google/Microsoft rose to the top
The dominance of Google's in the US search engine has remained uncontested. According to last year's laureate Wal-Mart results, Google was spotted to be the top while Microsoft was seen to have risen from position five to position two. Google AdWords was launched in 2000 but failed only to be relaunched in 2002. In 2003, they launched the Google AdSense. Google added a link that was supposed to make the market more efficient and allowed advertisers through pages and websites and there were adding auctions against keywords targeted. Google runs most of the world's search service which include; Google search, Google video, Google base, Google scholar among many others. In the month of August last year, goggle's market share has dropped slightly from 65.8% to 65.4%
Microsoft was given a contract into producing DOS for IBM since IBM had wanted Microsoft's Basic interpreter. WordPerfect also ported its word processor into a number of platforms and created its office suit like Microsoft did, Lotus also did the same thing. Microsoft used its major strengths to dominate all the other industries. WordPerfect, Lotus and the other companies did have the access to application calls (API's) that were built in windows in which Microsoft did not share with the other industries.
Microsoft has about 85% market share in the office suite market which comprises of the Word Excel Microsoft Exchange which is a mail client, PowerPoint which is a presentation package, and Microsoft Access which is a data base.
Microsoft Corporation is one of the largest companies in the whole world and it produces the majority of the computer operating systems. It is also the world's renowned producer for the leading spreadsheets and word processors for both Macintosh and windows operating systems. In the mid-1970s, the IBM was leading in the computer hardware industry. Microsoft was started in 1975 as a programming languages producer for the MIPS Altair 7500. In 1981, Microsoft purchased an operating system for an Intel based chip from Seattle Computer Products and in so doing, Microsoft was able to modify its product and licensed it to the IBM for its computers. IBM had held a monopoly over all the other computer companies and by allowing Microsoft to be able to develop their computer operating systems, and Intel in the developing their chips, IBM lost control in the software industry. Microsoft was not a monopoly when it first produced the MS DOS. By 1980s MS DOS ran in most computers and Microsoft was in control over the operating system market however, Lotus had the leading spreadsheet and WordPerfect had the word processor. The introduction of the Windows version 3.0 by Microsoft in 1990 cemented the Microsoft's current position as a software monopoly.
Microsoft has a strong hold on the market share for all operating systems. Microsoft's monopoly is unfair in that it goes against the antitrust laws. Some of the antitrust violations they did were termed as being unfair like the dumping of their products at a low cost in order to cause harm to their competitors, by trying to tie arrangements in between their various products, and many other practices that are usually regulated under the Antitrust law. Every time Microsoft added a new feature which is always prone to be twisted and can be used maliciously, and every time it releases new software, all the desktops are potentially prone to exploitation.
Microsoft Corporation was ordered by a US federal judge to split into two companies. Judge Thomas Penfield Jackson concluded that about two months ago that Microsoft corporation had greatly violated the antitrust law and he had to order the company to be split into two; one that would be able to oversee all the windows operating systems, and the second which will be able to handle all the other Microsoft software like its "word" program.
Google's dominance and rise in the search engine market is quite appealing. When it comes to the internet, Google is the dominant company since there are about 522 product listed in which Google offers besides from its web search business. Google is a very incredible and useful web service and applications and it is very hard to try to imagine living a world without Google. When you have Google, you can share and watch videos with many people in the world within an instance, create and edit 3D architectural drawings, be able to look up satellite pictures and images in seconds, write blogs, and lots more. The technological empowerment is easily accessible and it's also cheap.
Google's near monopoly was the main tool for navigating the World Wide Web where we had the results of its searches becoming a modern day mother lode. Outlaws were the emerging so as to try and beat other rival websites that were at the top. Google's computers have the capabilities to read every web page as compares to other SEOs. Google does not only offer search services, it also offers other services like advertising, demographic services and even keyword searching.
With so many businesses both big and small on the earth advertising on Google, the cost per click is increasingly becoming important and expensive. Businesses are paying three to five times for the same results since so many people and businesses are bidding for these slots for advertising which pushes up the prices as companies try to cover up their advertising costs by charging more for their products which makes it an antitrust violation. This problem would however become a very big problem since Google has a near monopoly which may become a true monopoly unless there is a change and there happens to be competition.
Microsoft's monopoly would be bad for consumers because they will be able to raise prices and not have to provide innovation to keep customers. The customers in this case, they don't really have a choice but to purchase the products from Microsoft since they actually need them. In order to stop the monopoly of Microsoft, the company should be subdivided into smaller companies
Google is a free service letting them become a monopoly is not that bad because they do not charge money however allowing a single company total control over an industry is still not good. When it comes to the searching services offered by Google, they are very fast and in this case, the consumer gains, but when it comes to the advertising services offered by Google, businesses end up paying more for advertising due to the high demand of the advertising slots therefore making the companies paying more in order to secure an advertising slot and they end up transferring these costs to the consumers who end up paying more for the products.
Competition law which is also called the antitrust law should be reinforced in order to maintain and promote market competition. This will be able to protect the consumers from unfair monopolists since they will no longer be taken advantage of. When many competitive companies are allowed to enter the market, the products will be much cheaper to the consumers.