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Microsoft's Marketing Strategy

In the mid-1990s, Microsoft was charged by the United States government with antitrust violations. As part of a consent decree intended to avoid a trial, Microsoft agreed to a series of steps designed to make it easier for personal computer manufacturers and others to select and install operating system software produced by companies other than Microsoft. As described below, Microsoft's position on this issue is straightforward:

This case is about the free enterprise system in conflict with government interference.

Microsoft enjoys what economists call a natural monopoly meaning that its products are superior in design, functionality, and price therefore Microsoft does not need to engage in illegal competitive practices.

Nothing Microsoft is accused of doing has increased the cost of operating systems to PC manufacturers or to end-users, nor have they reduced the quality of products.

Microsoft's dominant market share is the result of manufacturing a high quality, low cost product.

The issue the federal government raised in its antitrust complaint in 1998 was that Microsoft possesses a dominant, persistent, and increasing share of the worldwide market for Intel-compatible PC operating systems. The government argued that every year for the last decade, Microsoft's share of the market for Intel-compatible PC operating systems has stood above ninety percent, and for two years the figure has been at least 95 percent. More importantly, the gove


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