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What makes Microsoft a monopoly?

Hint: it's not their market share in the PC software market.

I repeat: What makes Microsoft a monopoly is not their market share.

It is actually much, much simpler.  In a nutshell:

It's that their entire product line rests upon state enforcement of legal monopolies of duplication called "copyrights" (that's what a copyright is: a monopoly on the duplication of an intangible such as software). And the most outrageous thing is that they outsource their costs of enforcement to you, the taxpayer.

Let's go with an example here. Imagine you want to enter the potato business. You buy one potato, and you plant it. You invest time and energy of your own into multiplying said potato and making a huge-ass farm, and when time comes for harvest, you can pick them up and sell them in direct competition with the guy who sold you the first potato.

Now imagine you wanted to sell Windows instead of potatoes: you buy a copy of Windows, duplicate it N times (certainly a cheaper investment, but an investment in time and money nonetheless), and start selling it. Exactly like in the potato example above. What happens here is that armed dudes show up at your doorstep and yank you into a cell, and your assets are taken away from you, whether they were involved in the commission of this act, or not. Now you are poor and possibly the shameful owner of a two-inch-wide gaping anus.

So, as you can probably see now, it is a crime to compete with Microsoft in the same products. You must invent your own non-potato if you want to compete with them, an act after which you are no longer competing in their products, but selling a substitute for their products. Essentially as absurd as a dairy product company claiming a monopoly on butter, so everybody else must sell margarine or else.

Imagine a world where there is only one purveyor of tangible products -- it'd be an epic disaster of the most abject variety of mercantilism, right? This is exactly what happens with software -- a disaster -- but you don't see how the alternatives could look like because you have always lived under this copyright enforcement regime. What you have is mercantilism for software now, only perhaps a bit mitigated because the free software movement -- the only area in which competition in the same product is explicitly permitted -- has successfully carved a small segment of the world. What you have now is the epitome of absurdity, but you don't feel it's absurd because you are used to it.

It is really that simple: if you compete with them, the state snatches you and puts you in a cage. The fact that nobody else is allowed to compete with them on the Windows and Office businesses, that is what makes them a monopoly.  They have an assortment of little monopolies enforced by the state and thus the moniker "monopolist" is objectively well-deserved, independently of their market share.

As usual, remember this: the fact that you do not see violence every day does not mean that you are not under a constant threat of violence.