Word: microsoft
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While a breakup is a harsh punishment, it is unclear whether anything weaker would effectively deter Microsoft from continuing its monopolistic practices. Conduct remedies that left Microsoft structurally intact but placed rules on its behavior would likely be evaded by the software giant; the antitrust case grew out of Microsoft's circumvention of a consent decree not to bundle Internet Explorer with Windows. Imposing permanent regulations on Microsoft's actions would thus require constant judicial monitoring (and constant appeals from Microsoft) to ensure compliance...
...government plan would place several restrictions on Microsoft's conduct for the next few years, such as mandating that Windows licensing fees be made public and that "unbundled" versions be available should Microsoft incorporate other software into Windows. Yet these short-term regulations will be far more effective accompanied by the breakup than would a system of conduct remedies alone...
...other side, there is an additional fear that the breakup will not be strong enough. The portion of Microsoft controlling the operating system could retain a monopoly. Some suggest that a better solution would be to auction the Windows source code to several other companies, immediately creating competing systems. However, competing versions of Windows could be sufficiently similar to create customer confusion and remove any real advantage from the split. Furthermore, were competing versions of Windows introduced while Microsoft still held on to its applications software, it would not be long before Office became more compatible with Microsoft's version...
...goal of the breakup is not only to create multiple competing operating systems, but to reduce the possibility that future software companies will be able to build a similar monopoly. The suit was designed to prevent Microsoft domination of "middleware" like Java and Netscape. Middleware allows software developers to write programs that function equally across different operating systems, making an operating system itself less relevant. After the breakup, the applications portion of Microsoft would have incentives for compatibility with as many platforms as possible. Linux (a Unix-like operating system) would become a much more viable operating system...
...final concern is that two monopolies might be more predatory than one. While a unified Microsoft had an incentive not to lose customers by raising the prices on Office and Windows too high, the two parts of a divided Microsoft could instead face a "prisoner's dilemma" and both choose to raise prices for consumers. However, this view attributes too much strength to the Office monopoly and assumes the two "baby Bills" will not work against each other. Applications software is by nature harder to monopolize than operating systems: Word documents can be read and written by Corel's WordPerfect...