The Delicate Balance between Competition and Monopoly – Article Summary

Article Summary

Discussing IBM (International Business Machines), Microsoft, Facebook, Google, Myspace, and Android this article illustrates the delicate balance between competition and monopoly. According to Dans (2016), IBM dominated the market in terms of software, hardware, and technology services and when the U.S. anti-trust agency launched proceedings against the company in 1969, the case was thrown out by the courts after dragging on for 13 years. Microsoft’s business strategy was developed in such a way that it made it very difficult for consumers to purchase personal computers that were not already installed with Windows operating system and thus cornering the personal computer market. It was based on thisparticular move that the company was accused of monopolistic practices in 2001(Dans, 2016). Currently, with an 80% share of the global market, Android has dominated access to the smartphone market, which has emerged as the fastest growing market in the world(Dans, 2016). Apple’s iOS, which is the only noteworthy competition, has a market share of less than 20% in the global smartphone market.

As Dans (2016) expresses in the article, the company that controls the operating system is able to control the App store and as such gets to determine the rules that govern the services and products that can be sold on the App store. These facts make the smartphone segment exceptionally susceptible to monopolies. For instance, if Google were to decide to refuse Facebook from accessing its Play Store that would exclude Facebook from its ecosystem and would effectively choke the company. As unlikely, as this may sound Google is capable of doing this if we are to consider history and the threats of excommunication it issued Acer if the company would choose to use operating systems owned by Alibaba. To insulate itself from such an outcome, Facebook’s strategy as the biggest social network in the world is to purchase anything potentially capable of disrupting the market such as an App that is gaining traction and becoming popular on the social networks. To this effect, Facebook owns Instagram, WhatsApp, Messenger and Facebook, the four out of ten most popular Apps on Play Store, effectively reducing the chance of a possible expulsion from Play Store.

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