rew Carnegie's of Carnegie Steel, in the early 1900's. When a competitor would come into town, he would lower his prices way below cost to drive the competitor out of business. He could afford to do this because he already had the established capital to sustain him. He would just dip into reserves of cash for the time being, and the lowering of prices would not put him out of business. This was deemed illegal and his practice is one of the main reasons that the Sherman Antitrust Act was enacted. According to the Act, no company can engage in monopolistic activities intentionally. If they lowered their prices temporarily to drive out competition, while depending on their cash reserves to hold them over, this would be illegal. But, if they do not lower the price of their products below cost, then their strategy is just a form of true competition. However, Microsoft has good defense arguments. Microsoft defenders say that the situation should be compared to railroad analogy: Microsoft builds the tracks on which the rest of the industry ships its products and that’s why Microsoft shouldn’t be stopped. With Microsoft creating the standards for the rest of the computer industry, they are able to create better standards and build them much faster than if an outside organization was to create them. With these standards set, other companies are able to create their applications and other products that much faster, and better, and thus the customers receive that much better of a product. However Microsoft still l gets to ride the rails first. On May 12,2000,Microsoft offered an ultimatum or at least a small step towards the better solution. Microsoft agreed to take off Internet Explorer from “Windows” operating systems. The company said, that it may be a small step from the government point of view, however a big step in company’s opinion. I personally, believe that the government should stay out of the aff...
