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a) When determining the relevant market for operating systems, would it make sense to include usedcomputers with older versions of Windows as part of the market? Based on your answer, doesMicrosoft have a “dominant market position” in the market for operating systems?

(b) Microsoft participates in a variety of conduct alleged to be anti-competitive including: (a) bundlingWindows 98 and Internet Explorer, (b) distributing Internet Explorer for free, and (c) using otherMicrosoft products (e.g., Windows 95 and Office) as chips when bargaining with Compaq, AOL andApple.Pick one of the three pieces of conduct above and discuss whether the conduct goes “beyond whatwould be expected of firms competing fairly on the merits of their products and costs?”

(c) If Microsoft is found to have violated the Sherman Act, what remedy(ies) would you suggest wouldaddress the anticompetitive concerns? Explain.

In addition, please think about the following questions you read the case. Do not include a responsein your case write-up. Rather, these questions are to help you prepare for the case discussion.

Should Microsoft worry about an entrant with a new operating system?

What is it about Java and Netscape Navigator that makes Microsoft so concerned?

This case happened when internet browsing was in its very early stages. If this case wherebrought today, would you reach the same conclusions?

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