Running Head: ETHICS ETHICS 2 Ethical Issues in Business Brianna Baldwin Grand Canyon University- BUS-340 Professor Nguyen Company Background: Summarize relevant information regarding the business and its history The company in question is Microsoft Company which is a multinational company located in the United States of America. The company came to existence way back in 1975 the 4th day of April and has ever since grown to become what it is currently. Initially the company was founded by Bill Gates alongside his partner called Paul Allen. Microsoft Company is currently regarded as the best software company that has enjoyed a wide market base in almost every part of the world. The company boasts of very many best-selling products such as the Windows operating system, Microsoft office, Xbox and a series of entertainment products such as games, video as well as music. The company also deal in search engines as part of its products. Since 1975, the company has not only and grown and developed but has also been subject to different ethical and legal issues. The following paper will address one crisis that took place in this company, and conclude by explaining the different ethical issues that were involved. Crisis Details: Summarize the ethical crisis details. What stakeholders were involved? What actions did they take? What were the results of those actions? The crisis came in the year 1998 whereby the federal government of the United States alongside other 20 states came together and accused Microsoft of practicing monopoly with respect to its computer software business. Under this allegation, there were three main issues that were raised. The first issue was with respect to shoving their browser ‘Internet Explorer’ with windows 98, which was the main operating system built by the company at that time. The second issue outlined was that the company used cross-promotional deals with certain internet providers so that it could extend its monopolistic status. The third major issue brought up was that the company prevented other personal computer makers from customizing the opening screen which shows Microsoft in an illegal manner. In the 8th month of the same year, deposition of the management of this company began. The CEO, who was Bill Gates was placed for 30 hours under a camera but failed to answer several questions which were asked about the company. From this act, it seemed as if Bill Gates was not worried nor concerned of the trial awaiting him and the entire company (Schmalensee, 2000). The trials began in October the same year whereby Bill Gates and his company was indicted for illegal bullying, intimidation as well as predatory pricing with an aim of undermining its main competitor which by then was Netscap ...

1. Running Head: ETHICS
ETHICS
2
Ethical Issues in Business
Brianna Baldwin
Grand Canyon University- BUS-340
Professor Nguyen
Company Background: Summarize relevant information
regarding the business and its history
The company in question is Microsoft Company which is a
multinational company located in the United States of America.
The company came to existence way back in 1975 the 4th day of
April and has ever since grown to become what it is currently.
Initially the company was founded by Bill Gates alongside his
partner called Paul Allen. Microsoft Company is currently
regarded as the best software company that has enjoyed a wide
market base in almost every part of the world. The company
boasts of very many best-selling products such as the Windows
operating system, Microsoft office, Xbox and a series of
entertainment products such as games, video as well as music.
The company also deal in search engines as part of its products.
Since 1975, the company has not only and grown and developed
but has also been subject to different ethical and legal issues.
The following paper will address one crisis that took place in
this company, and conclude by explaining the different ethical
issues that were involved.
Crisis Details: Summarize the ethical crisis details. What
stakeholders were involved? What actions did they take? What
were the results of those actions?

2. The crisis came in the year 1998 whereby the federal
government of the United States alongside other 20 states came
together and accused Microsoft of practicing monopoly with
respect to its computer software business. Under this allegation,
there were three main issues that were raised. The first issue
was with respect to shoving their browser ‘Internet Explorer’
with windows 98, which was the main operating system built by
the company at that time. The second issue outlined was that the
company used cross-promotional deals with certain internet
providers so that it could extend its monopolistic status. The
third major issue brought up was that the company prevented
other personal computer makers from customizing the opening
screen which shows Microsoft in an illegal manner. In the 8th
month of the same year, deposition of the management of this
company began. The CEO, who was Bill Gates was placed for
30 hours under a camera but failed to answer several questions
which were asked about the company. From this act, it seemed
as if Bill Gates was not worried nor concerned of the trial
awaiting him and the entire company (Schmalensee, 2000).
The trials began in October the same year whereby Bill Gates
and his company was indicted for illegal bullying, intimidation
as well as predatory pricing with an aim of undermining its
main competitor which by then was Netscape. Bill Gates,
however, denied all allegations stating that his company was not
concerned about Netscape issues. Microsoft began its defense
against the allegations in the 1st month of 1999. This is when
the management noted that its credibility had been ruthlessly
damaged. Jim Allchin one of the employees at Microsoft was
supposed to give a testimony stating that Internet Explorer
could not be separated from Windows. His testimony ended up
to be something else which brought the most severe damage to
the credibility of Microsoft Company. Due to this, Microsoft
had to make an effort to ensure the case was settled.
It was, however, very unfortunate that the two sides could not
settle the issue due to lack of a common ground. The
government wanted to place its officials as active members of

3. the management board, something which was interpreted by
Microsoft as an attempt to take its control. In November 1999
after a lengthy period of investigation, Allchin was found guilty
of masterminding shoving of the operating system together with
internet explorer, which was an endeavor to destroy Netscape.
The case went on to become great and solution was also
difficult to obtain. In the 6th month of 2000, Microsoft
Company was ordered to split into two, as a step towards
solving this case. One company was to sell windows while the
other company was to sell other products that had already been
developed by Microsoft. Bill Gates in conjunction with his
board members saw this idea as a way to kill the company
totally as there was no way they could survive while split. They
therefore, appealed with the judge and the ruling was
suspended. In 2001 June, it was agreed that Microsoft Company
had violated antitrust laws but the previous ruling on splitting
was dropped and the case was returned to a lower court for a
new ruling to be made. The entire issue came to a stop in
November 2002, whereby most of the provisions to settle the
issue were approved by Judge Collen Kollar. Microsoft was
barred from reacting against other computer manufacturers
among other factors thus solving the entire issue (Arvidsson &
Peitersen, 2013).
Ethical Issues and the Law: Explain the ethical issues
surrounding the crisis. Did the company act within the basic
tenants of the law? Include any related legal issues
There are key ethical factors surrounding the above mentioned
issues. As stated previously, the main unethical issues in which
Microsoft was found guilty of was practicing monopoly. One
unethical issue associated with this was the fact that it was
limiting competition among companies. Microsoft wanted to be
the sole company dealing in computer software. The second
ethical issue is also related to the first as it would limit
innovation among people. Competition among businesses
encourage innovation and creativity. As businesses compete,
they always want to outdo each other and the only way this can

4. be done is by encouraging innovation among the employees
(Eisenach & Lenard, 2012). It was so unethical for Microsoft to
try and diminish other companies so that they would not have
any competition. Pricing was another key factor coming out of
the crisis. It was evident that Microsoft wanted to remain a
monopoly so that it would dictate prices of its products to
remain profitable as the customers suffer. From all these it can
be seen clearly that the company failed to act within the basic
tenants of the law. They failed to act professionally with respect
to their deeds. A case which would have been solved long time
and in a very easy manner went up taking years before a
solution would be found, all because the company wanted to
gain both legally and illegally. There were various legal issues
that were associated with this company. The above case was
mainly related to antitrust law issues. A major legal case that
came up later was with respect to a number of patent
infringement cases. Despite all these, the company has remain
strong up to date and is currently one of the leading companies
in this computer software industry (Caudill & Murphy, 2000).
References
Schmalensee, R. (2000). Antitrust issues in Schumpeterian
industries. The American Economic Review, 90(2), 192-196.
Eisenach, J., & Lenard, T. M. (Eds.). (2012). Competition,
Innovation and the Microsoft Monopoly: Antitrust in the Digital
Marketplace: Proceedings of a conference held by The Progress
& Freedom. Springer Science & Business Media.
Arvidsson, A., & Peitersen, N. (2013). The ethical economy:
Rebuilding value after the crisis. Columbia University Press.
Caudill, E. M., & Murphy, P. E. (2000). Consumer online
privacy: Legal and ethical issues. Journal of Public Policy &
Marketing, 19(1), 7-19.