Chapter

Markets

in The Microsoft Case: Antitrust, High Technology, and Consumer Welfare

Published by University of Chicago Press

Published in print July 2007 | ISBN: 9780226644639
Published online March 2013 | e-ISBN: 9780226644653 | DOI: http://dx.doi.org/10.7208/chicago/9780226644653.003.0003
Markets

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This chapter, which investigates the markets at issue in Microsoft, also discusses the warring concepts of the operating system and its relationship to middleware, such as the browser and Java. It then reports the economic concepts, particularly the theory of network effects, that guided the framing of markets, and examines critically how courts defined the markets for operating systems and middleware. Microsoft was criticized for failing to incorporate some functions into earlier versions of Windows. The development of the operating system responds to both technological changes and consumer preferences. The court's emphasis on network effects obscures the influence of other economic conditions on the market. Microsoft undoubtedly had the power profitably to raise the price of Windows for a significant period of time without inducing consumers to switch to an alternative operating system. Software developers produce applications that are specific to and run on top of media players.

Keywords: markets; Microsoft; operating system; browser; Java; courts; middleware; Windows; network effects

Chapter.  12698 words. 

Subjects: Company and Commercial Law

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