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I was wondering, with MSFT getting the shaft from the government for being a monopoly, can someone explain to me how Gorillas are able to dominate their market yet avoid the "monopoly" stigma?

What is the difference between being the standard of an industry (which keeps competitors at bay) which a gorilla should be, and unfair monopoly practices?

Just curious....

Dreamer
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Dreamer,

What is the difference between being the standard of an industry (which keeps competitors at bay) which a gorilla should be, and unfair monopoly practices?

Not getting caught at it.

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lucid dreamer wrote:

I was wondering, with MSFT getting the shaft from the government for being a monopoly, can someone explain to me how Gorillas are able to dominate their market yet avoid the "monopoly" stigma?


simple...

it is not illegal to be a monopoly...

it is illegal to leverage a monopoly in one market space, oh, hypothetically, lets say, umm, desktop operating systems -- then leverage that monopoly into other markets like, oh, say, office productivity suites, back office suites, servers, web browers, media streaming, on-line data/news content, etc.


What is the difference between being the standard of an industry (which keeps competitors at bay) which a gorilla should be, and unfair monopoly practices?


therefore, it is not the market dominance of the gorilla that is being hunted by the mighty doj. it is the aberrant behaviour of a gorilla that leveraged a 95% market share in one market space into a large/monopolistic position in another market space.

iow, msft is not being persecuted by the government because it is a monopoly... it is being persecuted because it unfairly leveraged the monopoly of one product space to acquire a market advantage in another market space. that is the crux of the sherman anti-trust act.

bes

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Just a note. Antitrust law states that it is not illegal for a company to be a monopoly (as is the case with many Gorillas) but it is illegal to leverage that monopoly to gain an unfare advantage in another market (ie. Microsoft using its OS monopoly to move into the Internet browser market). That's why Microsoft is being prosecuted over its browser and not its operating system.

Krash
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<<Antitrust law states that it is not illegal for a company to be a monopoly (as is the case with many Gorillas) but it is illegal to leverage that monopoly to gain an unfare advantage in another market >>

To make it more confusing, it is a violation of the Sherman anti-trust act to engage in unfair business practices with the intent to become a monopoly.

The case against Microsoft is stronger in this respect. They acted with premeditated intent to drive Netscape out of the browser market by using their natural monopoly (read legal) in the operating system market. MS's own email is the damning evidence in this case. The emails quite clearly showed that the intent was real.

The intent to monopolize is also illegal given a set of additional criteria including market share. Whether the intent becomes real or not is actually irrelevant. If the criteria is met, and the intent is proven, then you have a violation of law.

Most Gorillas achieve monopoly status, but are considered natural monopolies (law term). This means that by superior business practices, core competencies, and/or superior product they become monopolies. This is not illegal as long as they don't try to lock anyone out of the market.

All of the wailing and gnashing of teeth over MS suprised me until I realized that few people really know what the law is. Anyone with the law in front of them can see that MS clearly crossed the line. Just how truly harmful to the consumer it was is very debatable. Both sides can make supportable arguments. With respect to the letter of the law, however, MS did wrong.

As far as GG is concerned, we investors have to realize that this is a special condition GG companies will be subject to. Market dominance comes at a price of increased exposure and oversight. Management of GG companies have to make sure they don't get carried away by competitiveness and cross the line. Otherwise our Gorilla may give birth to a bunch of chimps.

Chris
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Dreamer asked What is the difference between being the standard of an industry (which keeps competitors at bay) which a gorilla should be, and unfair monopoly practices?

I think it has something to do with trying to also be the "standard" in someone else's industry, like taking browser market from Netscape, or trying to take JAVA script from Sun Micro, or speech/voice reconition from new partner LHSP,OR

like my recent 3 hours on the phone with MSFT tech reps to get MSN removed from my computer so it wouldn't try to be the default connection to the Internet, even though I have a cable internet connection.;)

Harold



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