are thought of as Monopolies?
Several examples of Monopolies from the past and present
include Microsoft, AT&T and the U.S. Postal Service. During
the late 1800's and early 1900's there were many businesses and
industrial leaders within the United States that tried to reduce
competition, thus resulting in federal laws prohibiting against
them. In the current case against Microsoft, it is thought that
they are a monopoly because of their "bundling" of products
that the government says are different products, but Microsoft insists
are "integrated." It began when Microsoft released Windows
95 and included their Internet Explorer browser with it for free,
while the previously free Netscape Navigator began to bundle it
with e-mail and other services for $19, but eventually had to cut
their cost to zero again. This caused them to complain to the government,
which then led to a lawsuit. From then on Microsoft has been bundling
their products along with major system releases that continues to
this day. In the current release of Windows XP they included a link
in order to get people to sign up for Microsoft Passport, an online
validation system as well as MSN Messenger, a direct competitor
to AOL Instant Messenger. But more so Microsoft is thought by some
to be a monopoly because they are thought to be getting rid of the
competition through these shaky dealings with their products. The
U.S. Postal Service is also thought to be a monopoly by many, as
it is a federal crime to try to ship mail by anyone except the USPS.
The USPS is the only handler of first class mail, and thus has a
monopoly over that whole aspect of their business.
Many different companies in the past have been accused of
being Monopolies, and when this happens they might be told to stop
their monopolistic ways, or are told to break up into separate companies.
In the past AT&T was considered a regulated and controlled monopoly
of phone service, with Theodore Vail, the president of AT&T,
in 1907 thought that the business would work best as a national
telephone system. But in 1974 AT&T was said to be limiting long
distance service and phone equipment for MCI. The case was solved
in 1982 when AT&T agreed to split up their company and in 1984
formed eight different independent regional telephone companies
as well as a new AT&T, forcing them now to compete in the open
market. The main goals of acts like these were to get rid of plain
monopolies that could control everything and limit others, which
is understandable, but the effects of it are a little different.
AT&T began to lose their main business, which was long distance
in 1998, dropping from 90 percent to 50. This led them to buy MediaOne
and TCI in order to transform themselves into a communications company.
This has not worked though, and has caused them to lose money from
it. Now in this time phone companies and others that were broken
up usually have to merge together in order to stay profitable. In
heated competition prices can only become so low before companies
need to band together.
do Monopolies affect me?