The short answer is yes. A monopoly can legally force you to buy their product. If you don’t, you could be headed to court.
Imagine a world where your friends and family have been kidnapped by the mafia. You call the police, but before they arrive, they tell you they’ll only save them if you pay them $5,000.
This is similar to what Microsoft did in 2004 with Windows XP. They wanted to make more money off of Office users, so they bundled Internet Explorer with Windows XP. At the time, Internet Explorer was a dominant browser, so if a user didn’t want it and decided to install another browser (such as Opera or Safari), they would still be forced to pay for it by default when buying Windows XP. It was a “pay us or else” situation from Microsoft — but instead of paying them $5,000 like the mafia wants, you’re paying for an unwanted computer program that might not work very well on your machine (and can be exploited by malicious actors).
A U.S. court ruled that Microsoft had violated federal antitrust laws for tying Internet Explorer to Windows XP — which caused consumers harm by forcing them to pay for a product they didn’
The Washington Post reports that a federal appeals court ruled that Microsoft is legally obligated to give computer manufacturers access to older versions of its Windows software so they can sell “downgraded” computers to their customers.
We’ve written previously about monopolists using licenses and other legal devices to leverage control over their customers. This ruling is an important, if under-reported, development in the field of antitrust law.
The court ruled that computer makers are entitled to downgrade rights which allow them to sell Windows PCs loaded with Windows XP or Vista instead of Windows 7. The trial judge had ruled in favor of Microsoft, finding that there was no basis for the downgrade rights under the law because Microsoft had not agreed to them in writing with the computer makers.
The appeals court found that Microsoft’s conduct was exclusionary and anticompetitive because it harmed consumers by forcing them to buy only Windows 7 PCs. Because Windows 7 is not preferred by many users (for example, several large enterprises have chosen not to upgrade from XP), this meant consumers were forced to purchase products they did not desire.
Hello! As I’m sure you already know, there’s been a lot of attention recently paid to Microsoft’s Windows 10. Here at Monopoly Watch we are very interested in this story, because it shows the danger of allowing a monopoly to exist.
Microsoft is a monopoly of computer operating systems. This is bad for consumers because we have no choice but to use their product. And when they use this power to force us to buy things we don’t want, that’s bad for us too.
In the past Microsoft has used its monopoly power to force us to buy software we didn’t really want like Internet Explorer and MSN Search. These products were so bad that people stopped using them of their own accord, even though there was nowhere else to turn. But now Microsoft is using its power in a new way: forcing people to install Windows 10 even when they don’t want it! This is just wrong!
We at Monopoly Watch believe that the only way to protect consumers from monopolies like this one is for the government to step in and break up companies that grow too large or which dominate an industry.
I wrote an article last month about how Comcast is using its monopoly power to force consumers to use the company’s set-top boxes. The trouble is that the FCC — which is supposed to be protecting Americans from monopolistic behaviors from companies like Comcast — has a rule that requires consumers to use a box provided by their cable company.
Comcast isn’t the only company that is abusing its monopoly power in order to profit off of captive customers. Microsoft is doing it, too.
I wrote an article on Medium exposing the deceitful tactics used by Microsoft (and Apple) to force people into using their products.
The article was picked up by The Verge, but then it got removed! I’ll get into what happened in a moment, but first I want to explain how this works.
Microsoft has a monopoly on PC operating systems and Office software, both of which are required for most jobs these days. In order to keep its monopoly on these two products, Microsoft forces users to buy them every few years by changing the file formats so that they are not readable by other programs or older versions of itself. This means that you have no choice but to upgrade or else your files won’t work anymore! This also means that if you
Microsoft operates in a monopoly position, or close to it, in the markets for desktop and laptop operating systems and for office productivity software. The company’s attempt to extend its monopoly by bundling its Windows Media Player with the operating system is a matter of public record. Ironically, Apple, which had been squeezed out of the market for personal computer operating systems by Microsoft’s widespread adoption of its Microsoft-DOS and Windows operating systems, is now using the same tactic: Apple’s current operating system is only available on Apple computers (which are more expensive than many PCs), and only runs applications that are sold through Apple’s iTunes store.
The EU has ruled that Microsoft’s practice of bundling its Internet Explorer browser with Windows was an unfair practice that violated antitrust law. When faced with similar claims regarding its iTunes-only policy, Apple responded by pointing out that Windows users could choose (and indeed do choose) among numerous web browsers available at no cost.* But consumers cannot make such choices when Apple controls both the hardware and the software.
Microsoft may have been caught red-handed trying to use its monopoly position to extend another monopoly, but Apple has not been caught doing anything illegal yet. Of course most consumers see what it is attempting to
A number of people have asked me how Microsoft could legally be forced to disclose the protocol. I will try to explain, but, in advance, let me say that I am not an expert on the law in this area. For more information about this case and other cases involving the application of antitrust law to high tech, visit the Antitrust Institute website.
The immediate legal question is one of contract interpretation: under what circumstances can Microsoft be required to disclose the protocol? The underlying question is whether Microsoft’s refusal to disclose the protocol violates antitrust law.
To answer that question, we need to know a little bit about how antitrust law works. To put it simply (and oversimplifying), antitrust law consists of three rules:
Don’t use your monopoly power to force consumers or competitors to buy your products. That’s called tying, and it’s illegal if you have monopoly power.
Don’t use your market power as a purchaser or a seller of goods to force purchasers or sellers of goods to do business with you instead of someone else (or you alone). That’s called exclusive dealing or monopsony and monopoly respectively, and it’s illegal if you have market power. (Note: a monopoly is different from a monopsony; the difference is that
In the latest act of digital privacy theater, Microsoft has been hit with a class action lawsuit over the way it collects and stores data from Windows 10 users. The suit alleges that Microsoft’s data collection practices violate user privacy and federal wiretapping laws, and seeks compensation for users as well as a court order to prevent Microsoft from continuing its current data collection practices.
The complaint alleges that Microsoft monitors user activities on their Windows 10 devices, such as the websites they visit, the program and apps they use, and even the content of emails and files stored in personal folders. The complaint also alleges that Microsoft “intercepts communications” by collecting info about who users communicate with and when they communicate with them.
Microsoft claims that it only collects this info “to improve performance, protect security, enhance functionality…and provide more relevant advertising.” And while most people are probably perfectly fine with this type of data being collected (after all, you’d have to be living under a rock not to know that online services collect information about their users), there is likely a subset of people who are annoyed or concerned about this type of practice.
But there may be an even bigger issue at stake here: whether Microsoft can be sued for its data collection practices