Alert: Microsoft + LinkedIn + Yahoo! = Monopoly

Microsoft has built a strategic alliance with LinkedIn and Yahoo, which seemingly, would create one of the biggest monopoly in enterprise computer that gives its MS Office applications an edge on all desktop workstations, which uses the Microsoft Operating Systems in the cooperate work environment. This is a scheme whereby corporate organizations will deploy on their workstation only software owned either by Microsoft or by other partnering companies.

Strategically, Microsoft has successfully positioned itself as one of the most powerful cloud-computing provider under its enterprise solution environment such as Office 365. This may result in what may become one of the greatest ever monopoly, which will result in extensive legal tussles, such that has never occurred in recent history. Many other major competitor, which include Google, Twitter and Facebook are victims already, because through third-party agreement with its enterprise partners, especially the multi-national companies, Microsoft has been able to shut out Twitter, Facebook, Snapchat, and quite a number of others.

Efforts by Microsoft to build this strategic partnership started since 2008 when it first offered to take over Yahoo in an attempt that was rebuffed by the company at the initial stage due to legal concerns that the United States Justice Department raised about the Clayton Act, which prohibits mergers or acquisitions that are likely to lessen competition.

However, in 2019, just a year after, Microsoft successfully brokered a deal with Yahoo to relinquish its search technology in exchange for a revenue sharing arrangement that will enable Yahoo earn an agreed percentage on all advertisement and listings from the company on the Microsoft Bing search engine platform. This agreement, which undergo several improvements over the years that until this moment is still in force, helped to increase the market share of Bing search engine, a Microsoft company, to over 2.37% worldwide, as at the end of 2018.29

On the social media front the leading B2B social media site LinkedIn whose former Chairman, Reid Hoffman, and who is now part of the board of Microsoft announced the $26.2 billion buy-over and merger of the two companies in June 2016.30 The partnership, according to Reid, has availed new resources and technology assets to the newly acquired B2B company.

The upgrade of LinkedIn learning courseware with the Microsoft HoloLens mixed reality technology for learning marks the beginning of a new consolidation process in the global workplace. Riding on the wings of its powerful Windows Operating System, Internet Explorer, MS Office 365, Bing search engine, and the newly acquired LinkedIn B2B social as well as its consolidation with the web/email service provider, Yahoo, creates an enormous control and dominance of the global workplace.

The strategic integration of all these company’s resources, has led Microsoft to successfully create a complete application environment where other social media and cloud software providers, are systematically, been edged out of the workplace. Some large corporations have started prohibiting the use of other social media sites such as Facebook, Twitter, Gmail in the workplace, but allowing the use of only sites such as LinkedIn and Yahoo that have affiliation with Microsoft.

Microsoft has started introducing an all-Microsoft application business model that will provide what could be terms as a more secure systems environment that addresses integrity issues as well as information protection concerns. This arrangement has made these large corporations, which will systematically eliminate its competitors from all systems operating under the Microsoft application platform.

This development is worrisome, because apart from the fact those corporations now impose on its employees the social media sites and private email provides that they must use, it creates an unfair economic environment, which gives Microsoft an edge over other competitors and a clear abuse of its monopoly.

©TheEconomist

The Sherman Antitrust Act outlaws all contracts, combinations, and conspiracies, making it a crime to monopolize any part of interstate commerce that unreasonably restrain interstate and foreign trade. Under this Act, the activities of Microsoft form the biggest threat to growth of the Internet and thereby gaining an undue monopoly over its competitors.

The first time that Microsoft got itself entangled in a monopoly, lawsuit was in May 1998, which the United States Department of Justice initiated alongside 20 other States in the Union; and Joel I. Klein prosecuted the case, after a prolonged investigation into allegations that Microsoft was abusing its monopoly on the PC Operating System market.31

In 1992, the Federal Trade Commission began an inquest into the allegation, and on November 5, 1999, Judge Thomas Penfield Jackson issued his findings stating that Microsoft dominated the x86-based personal computer operating systems market.32 That it constituted a monopoly, also that Microsoft tried to undermine its competitors, such as Apple, Java, Netscape, Lotus Software, RealNetworks, Linux, and several others.

Judge Jackson, on April 3, 2000 reached a conclusion that Microsoft had committed monopolization in violation of Sections 1 and 2 of the Sherman Antitrust Act. That resulted in a judgement on June 7, 2000, whereby the court ordered a breakup of Microsoft into two separate units, one to produce the operating system, while the other is to produce other software components.

In defense, Bill Gates claimed that Microsoft's involvement in the application market with products such as Multiplan and MS Word was not meant to be a major operation, and that the focus was mainly on Windows. Looking at the rate of buy-overs and mergers, which obviously is building up another monopoly lawsuit. Unless adequate measures are in place, if the company continues along this part, it is almost certain that this issue may degenerate to an unavoidable monopoly saga. At the current pace, the number of companies that will buy into Microsoft subtle domination of the workplace may escalate into a dangerous affair that will hurt the software industry greatly.