Microsoft – Unethical Practices
Microsoft – Unethical Practices
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As at 2010 Microsoft profit was 6. 7 billion dollars with 93 thousand employees. Software bundling by Microsoft May 1988 the united state department of justice took Microsoft to court over the abuse of its monopoly power on operation systems for personal computers. Microsoft was bundling its flagship Internet explorer software with its Microsoft windows operating system. This gave Microsoft the advantage in browsers because all Microsoft windows user had a copy of Microsoft explorer. The other web browsers (Firefox, Netscape navigator or opera) if free were slow to download or had to be purchased in a store.
Bundling is forced on any Microsoft windows user and Microsoft made sure we did not have a choice in whether or not we want to user Internet explorer. Removing Internet explorer from Microsoft windows is not an easy task and it also causes Microsoft window to malfunction or slowdown dramatically. Product bundling was not enough for Microsoft to enforce internet explorer on windows users, Microsoft have supposedly altered its application program interface (APIs) to favor internet explorer over any other internet browser.
Microsoft’s argument for bundling its window and its explorer is that it is the result of innovation and competition and augured that it is one product two that were inseparable. They merely improved the product by giving windows user the benefit of explorer for free. If so then why is internet explorer sold separately and not attached to the operating system like in the case of internet explorer for Mac operating system. Bundling the two products together is what really makes the price of windows higher than it should be; there is definitely a development cost so it can’t be free.
This is a classic example of Microsoft “embrace, extend and extinguish” strategy. The strategy’s three phases are “Embrace: Development of software substantially compatible with a competing product, or implementing a public standard. Extend: Addition and promotion of features not supported by the competing product or part of the standard, creating interoperability problems for customers who try to use the ‘simple’ standard. Extinguish: When extensions become a de facto standard because of their dominant market share, they marginalize competitors that do not or cannot support the new extensions”, (Nyman, 2010).
They infiltrate into your market even if they did not have the product at fist then they start bundling it to users of Microsoft window taking advantage of the market power they have and force other product out completely even though they might have been there first. Internet explorer is not only the product bundled in Microsoft. They also include a number of software and programs like Microsoft messenger to prevent users from using yahoo messenger and Google chat when you purchase Microsoft office. This tactics have been used on all of us because the choice on the program we to use have been made for us.
Predatory Practices Microsoft is well known for its unfair competitive practices. To mention a few, Microsoft tends kill off competition by either buying the competitor or by buying their product. Another way is done by manipulating its existing customers by forcing new products on them. It takes advantage of its Operating System monopoly by to entirely out-spend its competitors. One very famous case was that of Netscape. When Netscape came into the market, Microsoft spent millions of dollars to create a competitor to the Netscape’s web browser to drive them out of business. It did not just create the competitor.
Microsoft gave it away for free. Not only this, Microsoft spent loads of money on promoting the product, offering customers extra free products if they make the switch from Netscape to their product. Netscape had no possible business defense for this because Microsoft was literally buying customers or paying them to use their product. To make matters worse for Netscape, Microsoft used its monopoly power on Original Equipment Manufacturer (OEM), computer manufacturers such as Dell. It warned them that if they put Netscape browser on any of its computers shipped, they would lose their Microsoft licenses.
For OEMs, losing their Microsoft business would have put them completely out of business, so they did not have any choice but to submit to Microsoft’s demands and not install Netscape even when the customers asked for it. OEMs cannot even attempt to differentiate their computers from others by installing more than one operating system, referred to as Dual Boot System. This is because of the contract they have signed with Microsoft that forbids them to install non-Windows operating system. Microsoft has gone to great lengths to protect its tactics by making sure the contract is classified as a trade secret.
Microsoft even forced major internet site operators to agree to not sponsor Netscape or have any business relation with it, or else they would not have featured placement on the Windows desktop. Finally, Microsoft kills competitors by buying them or their products. One such example is when Microsoft licensed the Mosaic web browser from Spyglass and turned them into an Internet Explorer. Microsoft jeopardized Spyglass’s business by giving away the licensed code for free. Spyglass now could not sell other licenses because their potential customers could just embed Internet Explorer for free.
This lack of innovation is a very recurring habit of Microsoft’s, to reap the rewards for other people’s hard work, which started way back at the start when Bill Gates bought DOS, the main product that enabled Microsoft for their entire monopoly. And it wasn’t even created by them, (Timothy W Macinta, 2011). Another case where Microsoft has used its extreme power was found in 1998, when Mountain Blue Arts, an established company that produced and sold electronic greeting cards, discovered that two separate Microsoft products, WebTV and Outlook Express, had started to involuntarily delete their greeting cards.
Not surprisingly, this had begun when Microsoft was had just commenced to launching its own electronic greeting card service. Mountain Blue Art had sued Microsoft and the judged acknowledged the unethical act by granting preliminary restriction against Microsoft, (NA, 1999). Evangelism Practice This practice of evangelism was done by Microsoft a lot. They had Technology evangelist who used to work with Microsoft (TE). These practices were carried out by Microsoft in the year 1992 until 2000. In 2000, James Plamondon who was one of the evangelists exposed about this unethical practice by the Microsoft.
Evangelism mission was to establish platforms throughout the computer industry. Platform is any software service which an ISV’s code assumes is present in order for it to function properly like windows is a platform of Microsoft. The mission was to drive the success of Microsoft platform by creating a mass of third party software application. Microsoft creates third party software to earn a lot and it becomes impossible to work without these applications. Third party application and business solutions are the measurement of the success of evangelism.
Evangelism is the art and science of getting developers to ship products that support Microsoft’s platforms. Evangelists were hired to help Microsoft not the customers so that Microsoft achieves its maximum profit by blowing the competition away. Their strategy was to attack the enemy’s plans and Microsoft wins when their enemies quits and they quit due to lack of support, public humiliation and low return on investment. These acts are considered as ethical in the eyes of others. That’s how the whole Evangelism process works and Microsoft makes the most out of this unethical practice. Unethical Labor practices
Although this is true that Microsoft’s permanent employee’s have the benefit of the best corporate treatment, most of the labor pool consists of “permatemps” employees, employees who are made to work for years under the title of “temporary” employees and therefore they are given no benefits which are given to the permanent employees like health insurance , fuel benefits or given staff quarters, they use the forced retention tactic, whereby if any employee look to break their contract terms and try to leave Microsoft they would be sued to prevent them from resigning or leaving Microsoft.
Microsoft also uses more traditional cost-saving techniques, ranging from not providing medical benefits and also going as low as not providing towels in the company locker rooms (Greene, J ET all, 2005) In the past Microsoft has also been come under accusation of overworking their employees, in Mainer cases it has lead to burnout (A psychological phrase for the occurrence of long-term exhaustion and also resulting in diminishing of interest).
Within a couple of years of joining Microsoft, the company is frequently referred as a “Velvet Sweatshop”, a term which was originally seen in a Seattle Times article in 1989 and shortly was used to portray Microsoft as a corporation by their very own employees,(Bendich ,2007). The main focus of this term is that the company provides ultimate leisure for its staff and in a convenient position, but in exchange makes them do long overtime hours to a peak which would lead to an elongated health danger.
For instance the kitchens have free cold drinks and food and numerous of the Microsoft’s buildings include in house gyms and bathrooms. Although the accusation stands that they keep their staff at Microsoft for unjustly extended working hours and having to do too much work. A United States lawsuit was brought forward in opposition to Microsoft in 1992 on behalf of employees currently working and also the previous employees of Microsoft totally up to 8,558 which was recognized as “Vizcaino v Microsoft” these employees were known as “temporary” or freelance employees at the company.
In the year of 1993, the lawsuit has been deemed as a US Federal Class Action in the US District Court Western District of Washington At Seattle as No. C93-178C. The concluding decision was given in 2005. The argument against the defendant (Microsoft) was that these “permatemps” and other temporary employees worked with the “permanent” workers and did similar work in the same environment, and at times had to do it for longer hours. After years of hearing and court setbacks Microsoft finally agreed to settle the law suit for 93 million US dollars.
A consequence of the lawsuit was that now the temporary employees at Microsoft were not allowed to work with the regular employees and also were restricted to participate in social events and other morale boosting events of Microsoft which would given an “image” of them being regular employees, these employees would also be on a strictly 1 year contracts and would have to leave Microsoft for almost 100 days before they could join again. Conclusion
Microsoft faces many ethical issues as discussed in the report mainly being the issue of unfair monopolistic behavior by Microsoft and the regular trials to sabotage competition and hinder other corporations to come forward, Microsoft should clean up their business practices as to not hinder other companies and play fair with its head to head competition Reference list •Greene,
http://www. neilstoolbox. com/bibliography-creator/reference-website. htm
http://www. kmfms. com/whatsbad. html
http://www. groklaw. net/pdf/Comes-3096. pdf
http://en. wikipedia. org/wiki/Criticism_of_Microsoft
http://www. rantroulette. com/2009/06/a-closer-look-at-microsofts-unethical-business-practices/