
It has been suggested that giving IE away at no charge amounts to predatory pricing. However, that ignores the fact that predatory pricing requires pricing below marginal cost. The marginal cost of making additional copies of IE software is virtually nil. Moreover, the license fees for Windows certainly cover all costs, including those related to IE. The claim of predatory pricing also ignores the fact that Netscape, the dominant provider of browsers (accounting for over 60 percent of the browsers in use), also essentially gives its browser away free. Finally, given that IE is a distant second to Netscape's Navigator and that Navigator is supported by substantial players such as Oracle and Sun Microsystems, it is not realistic to believe that giving away IE will drive Netscape out of the market, allowing Microsoft to drive up the price of browsers.
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