> It wasn't.
It was ruled in 2001 that Microsoft, indeed, had a monopoly on the PC operating system market which they used to overtake the browser market. They did this through private contracts with OEMs and distributors such that all PCs sold to customers were to include Windows and only Windows.
> Judge Thomas Penfield Jackson issued his findings of fact on November 5, 1999, which stated that Microsoft's dominance of the x86-based personal computer operating systems market constituted a monopoly, and that Microsoft had taken actions to crush threats to that monopoly, including Apple, Java, Netscape, Lotus Software, RealNetworks, Linux, and others. [1]
> So they the competition quickly routed around them and made them irrelevant.
That's certainly true for some of their products, such as Internet Explorer, but certainly not for Windows on the desktop.
The PC operating system market is not the server or mobile OS market.
> Where's Microsoft "monopoly" today?
They own the PC operating system market.
> Unless there is regulation. Regulation raises the barrier of entry, discourages start-ups and thus protects the monopolistic company from the competition.
Microsoft created barriers of entry into both the PC operating system and browser markets through anti-competitive tactics. If by government regulation, you mean "court enforced contracts", I'd agree with your premise.
[1] https://en.wikipedia.org/wiki/United_States_v._Microsoft_Cor...