Monopoly

Despite these legal prohibitions, not all industries and activities are subject to them. LABOR UNIONS monopolize the labor force and take concerted action to improve the wages, hours, and working conditions of their members. The Clayton Act and the NORRIS-LAGUARDIA ACT of 1932 (29 U.S.C.A. §§ 101 et seq.) recognized that unions would be powerless without this monopolistic behavior and therefore made unions immune from antitrust laws.

A government-awarded monopoly, such as the right to provide electricity or natural gas to a region of the country, is exempt from antitrust laws. Government agencies regulate these industries and set reasonable rates that the company may charge.

Sometimes an industry is a natural monopoly. This type of monopoly is created as a result of circumstances over which the monopolist has no power. A natural monopoly may exist where a market for a particular product or service is so limited that its profitable production is impossible except when done by a single plant that is large enough to supply the entire demand. Natural monopolies are beyond the reach of antitrust laws.

Special-interest industries, such as agricultural and fishery marketing associations, banking and insurance industries, and export trade associations, are also immune from antitrust laws. Major league BASEBALL has been exempted from antitrust laws as well.

The phenomenal popularity of the personal computer (PC) in the 1980s and 1990s catapulted Microsoft Corporation past manufacturing corporations as a preeminent business organization in the United States and the world. With the explosion of interest in the INTERNET in the mid-1990s, Microsoft moved aggressively to market its Internet Explorer (IE) web browser and to crush its competitor, Netscape. Having already secured a monopoly with its Windows Operating System, Microsoft seemed poised to dominate Internet software. However, in 1998, 19 state attorneys general joined the U.S. JUSTICE DEPARTMENT in filing an antitrust lawsuit against Microsoft. The suit alleged that the software company forced computer manufacturers (known as original equipment manufacturers or OEMs) to license and distribute Microsoft's IE in exchange for the right to pre-install Microsoft's Windows 95 operating system on new PCs. Microsoft contended that IE was an integral part of Windows 95 and that it could not be separated without causing the operating system as a whole to malfunction. The plaintiffs argued that Microsoft was engaged in an illegal TYING ARRANGEMENT, by conditioning the purchase of a popular product (Windows 95) on the purchase of an additional, unrelated product (IE.)

The case came to trial in October 1998 before U.S. District Court Judge Thomas Pen-field Jackson, sitting without a jury. Jackson ruled for the plaintiffs in November 1999, finding that the facts fully justified the conclusion that Microsoft had sought monopoly power through illegal means. He appointed Chief Judge RICHARD A. POSNER of the U.S. Court of Appeals for the Seventh Circuit to mediate the case, in hopes of bringing the bitter conflict to a quick conclusion. However, Posner could not broker a settlement, and Jackson issued his final order in April 2000. He ordered that Microsoft be split into two companies and that the companies desist from monopolistic conduct. A federal appeals court overturned this decision in June 2001. Although the panel agreed that Microsoft had engaged in monopolistic practices, it found that Judge Jackson had committed misconduct by making derogatory comments about Microsoft. The case was sent back to another district court judge, who encouraged new settlement talks. In August 2002, the U.S. Department of Justice and the states agreed to a settlement in which Microsoft did not have to split apart. Instead, Microsoft agreed to allow OEMs and consumers to add and remove access to certain Windows features and to set defaults for competing software. Microsoft also made available to software developers a host of software interfaces and tools at no charge, to allow the developers to write Windows applications.