On June 7, 2000 Microsoft was found GUILTY of illegally maintaining its monopoly power by anticompetitive means and attempting to monopolize the Web browser market by unlawfully tying its Web browser to its operating system.
Besides that, Microsoft also using its monopoly power to affecting the pricing in the market and this make the PC users suffered on it. Moreover, Microsoft has forced Windows 98 users uninterested in browsing to carry software that, while providing them with no benefits, brings with it all the costs associated with carrying additional software on a system.
2. What are the major issues in this case? How have these issues evolved?
There are two issues in this case:
Microsoft had over-crossed the line that it is supposed to be (corporate issues)
In this case, Microsoft had take over the business of Netscape which major in Web browser while Microsoft is major in Windows. But, Microsoft had come out with an Internet Explorer (IE) to replace the Internet Navigator that created by Netscape. Microsoft used bundling as a strategy by distributing its Web browser Internet Explorer (IE) free with its Windows 95 and 98 operating systems.
Microsoft charged different OEMs different prices for Windows (systemic issues)
In this case, Microsoft used its monopoly power in effecting the pricing in the market. Microsoft raised the price it charged OEMs for Windows 95 to the same level charged for Windows 98, just before it released Windows 98. So, the consumers have to suffer the unreasonable high price because there is no products currently in the market or anticipated in the near future can be substituted for the Intel-compatible operating system without incurring substantial costs.
3. Identify the stakeholders and their stakes in this case.
Stakeholder
Stakes
Shareholder
The stake of shareholder in Microsoft is to maximize their profit. They wish that the money they invest in company will gain the most profit they can have.
Government
The government is to control the environment of the social environment so that they can protect its own people from suffering for high prices for purchasing items that they need, but this might be different in different country.
Management team
The management team responsibility is to be responsible for the shareholder of maximize their profit and to inform the shareholder about the work that they are doing with.
employee
Employee is the people who work in the company and the company is responsible to pay their salary to their employee. The employee also must make sure that the company is able make profit so they can have their salary.
customer
The stake of customer is to ensure that they buy quality stuff with a reasonable price.
4. Do you agree or disagree with the legal and court decisions made to date in the case? Explain.
Agree. Because in this court decisions have bring benefits to consumers that they desire to separate their choice of a Web browser from their choice of an operating system. Some consumers, particularly corporate consumers, demand browsers and operating systems separately because they prefer to standardize on the same browser across different operating systems. For such consumers, standardizing on the browser of their choice results in increased productivity and lower training and support costs, and permits the establishment of consistent security and privacy policies governing Web access.
5. How have the environment (see chapter 1) changed in this case? Explain.
In this case, the environment that had changed is consumer environment because of the floatation of pricing that make consumer suffered on it. Besides that, the external environment which is competitor would have become its partner in this case because now they have been combining in the personal computer.
6. How has Microsoft's competition changed since this case?
The climate of competition in an industry sets a standard of behavior for those who hope to prosper within it. In this case, Microsoft has big changing in its competition since this case because before this it is consider as monopoly in the industry but now with court decisions it became oligopoly because there are more choices in the industry now and customer to choose their desirable application and do not have to just stick with the internet explorer that customer might not like as they can now pick what they like in their own personal computer. This have benefit customer in the end and Microsoft would have to come out with more product to impress customer. Microsoft also cannot monopolize its price and cannot gain more profit since under oligopoly market is more concerns about interest of society, economic freedom, and justice.
7. Suggest a settlement to the case. Should Microsoft be punished? How?
Microsoft Corporation should be completely dismantled and the parts sold to various third parties. Bill Gates should be punished.
At the very least they need to restrict Microsoft's licensing practices. The OEMs are much more in tune with user's needs and wants than Microsoft will ever be. OEMs should be allowed to do anything they want with Windows on their PCs. If they decide to remove the web browser, include an alternate shell program, or install Non-Microsoft software they should be allowed to do it.
Additionally, Microsoft should be forced to fully document their APIs and provide them free of charge to anybody and everybody who wants it. As much of the Windows source code as possible should be made available for all to view.
Microsoft's operating system and application sections should be split up. Otherwise we will certainly see MS-Word as a mandatory "operating system component" in future releases of Windows. In the short run it wouldn't affect the operating system sections monopoly on Windows, but when the application section no longer has a direct interest in promoting Windows, perhaps they will port some of their stuff to other operating systems and Microsoft Internet Explorer will go to application section.
8. What are the lessons from the case and since this case?
In conclusion, we think that the court decision is done right for all. As Microsoft have already monopolize the computer industry but have yet not given much choices to consumer and even tried to cross the line by giving up free internet explorer with windows 95 and windows 98 to customer that uses windows with them and has cause Netscape application to have less customer and forcing them to be out of the industry. By the court decisions, it has made more companies application able to access into windows and have given more choices for users as they can choose their desire application with a more reasonable price. Oligopoly gives benefits of price fixing, manipulation of supply, and exclusive dealing arrangement.
Human also have human right to own anything. The rights that are available are right to do any action, rights to own any belonging, right to voice up their own opinion although all these might not be guarantee by the government. All these rights are known as Human rights. In the case study above about Microsoft Company, consumer and competitor both also have the right to sell and purchase anything they desire. All humans have average right and no one have the access to have more rights compare to others. That is why the court did not let Microsoft to continue in monopolizing and give freedom to consumer have the right to choose. In the end of the case, customers also have to right to voice up their problem in the court.
CASE 2:
DOW CORNING CORPORATE AND SILICONE BREAST IMPLANTS
1. Identify major stakeholders and stake in this case. Who gained and who lost in this case?
Stakeholders
Stakes
Customers
Healthy
Shareholders
Wealthy by return from investment
Management
Profit
Employees
Employment or work
Communities where company operate
Development of the place and business increase
At first, the Dow Corning Corporation gained profit by revenue of breast implants and customers gained a beautiful body when they make surgery of breast implants.
After the problem of the implants ruptured, the company became lost because want to make compensation for customers and lost its reputation. Other ways, the customer lost their healthy; maintain implant problems cause pain in the chest, arms and back, as well as debilitating autoimmune diseases. After the controversy of silicone breast implants, the customer just can claimed back a little money for compensation by the company.
2. Was the Dow Corning Corporation justified in considering bankruptcy? Why or why not?
The Dow Corning Corporation was considering bankruptcy because the company's reputation suffered grievously. By March 1992, the common view of the company in the public mind was that its devices were not safe, that it had covered up evidence about their safety and insensitive. Its actions amounted to a 30-year medical experiment on women who were uninformed as to the risks about the breast implants. The public are not confidence with its device and no customer want to buy its device again.
Furthermore, in 1993, almost 9,000 individuals filed law suits against Dow Corning claiming medical injury from their implants. By May 1995, the company faced more than 20,000 individual suits. In addition, since early 1992, Dow Corning had faced a class action law suit brought by more than 100,000 claimants that hoped to compensate those injured by the implants more quickly. Dow Corning saw the number of claimants in this suit rise above 400,000. Dow Corning filed for Chapter 11 bankruptcy. This means the company saw its assets could not cover the liabilities it expected from the suit.
3. What are the ethical issues and principles involved in this case? Who has acted the most responsibly? The least? Explain. Who in this case was at fault? Support your answer.
The ethical issue
Whether the implants do or do not cause harms to patients. (Systematic issue)
A small minority of recipients in about two million nationwide have received breast implants, complained that the implants have ruptured, allowing gel to leak into the breast cavity and migrate to other parts of the body, and cause debilitating autoimmune diseases.
Dow Corning Corporation failed to inform shareholders and clients that some of their employees felt there was reason for concern about safety. (Corporate issue)
Dow Corning Corporate must decide to inform shareholders, employees and clients about the safety of the product.
The principal
Utilitarianism
The product that Dow Corning Corporation provided will bring effect to client's health. Dow Corning Corporation should inform customer about the effect and won't bring harmful to clients.
Rights
Everyone have rights to know the true, and have something that will bring benefit. Due to gain the higher profit, Dow Corning Corporate failed to inform shareholders and clients about the safety of the product.
The implants had cause harms to clients because of didn't get any information from DCC before reconstructive breast surgery. Clients do not have opportunity to know about the safety of product.
Justice and Fairness
Retributive justice
Dow Corning Corporate should get penalty for their illegal action.
Compensatory justice
Because of used product Dow Corning Corporate, some of the client are get harmful and bring effect to their healthy, so Dow Corning Corporate have to make compensation to client.
The most responsibly is the Dow Corning Corporation because it's give compensation for the claimants who get harm after surgery of breast implants. The least responsibly is the manufacturer who manufacturing the ruptured silicone breast implants that cause harm to patient.
The people at fault was the manufacturer were not sufficiently producing something very good and as the measure of the safety for breast implants, therefore they banned the sale of those kind of breast implants which were filled with the silicone gels.
4. Evaluate the statement of Dr. Angell, "Only by relying on scientific evidence can we hope to curb the greed, fear, and self-indulgence that too often govern such disputes [referring to disputes raised in this case]. This is the lesson of the breast implant story." Do you agree? Is this the major or the only lesson from this case? Explain.
Disagree, because we not just only relying on scientific evidence to curb the greed, fear and self-indulgence that too often govern such disputes. Every incident have different point of inception, all the attitude and behavior are govern by our own point of view.
A company must corporate with responsibility and ethics to avoid some harmful effect for customer. Dow Corning Corporate was not be responsibility when conduct their business because the company produces ruptured implants for customers and not inform to the stakeholders and clients that some of their employee felt there was reason for concern about safety.
