David Charter: Analysis
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Thirteen judges signalled bad luck for so-called superdominant companies yesterday and confirmed Europe as the world’s most hostile arena for private sector titans.
It will not have escaped corporate America’s notice that Microsoft’s humiliating legal defeat came in Luxembourg at the hands of the Brussels-based European Commission, over a case originally brought by a rival American company, Sun Microsystems.
Microsoft has survived other attempts to break its iron grip on the PC and server software markets in America, Japan and South Korea.
However, Europe’s judges backed the Continent’s regulators over an aggressive market intervention strategy that, according to some observers, will provoke an antitrust lawyers’ bonanza.
There is no doubt that Neelie Kroes, the European Competition Commissioner, will have been emboldened by the success of the strategy begun by her predecessor, Mario Monti, of Italy, back in 1998.
Even though the reasoning of the European Court of First Instance was tied tightly to the facts of the Microsoft case, there are bound to be far-reaching ramifications for the technology sector and beyond.
Companies that dominate particular IT sectors, such as Apple, Intel and IBM, will feel more vulnerable today, if only for Ms Kroes’s repeated assertion that Microsoft’s 95 per cent share of the PC software market was far too high.
The former Dutch Transport Minister did not put an ideal figure on market share, but even the suggestion that a high figure could trigger antitrust investigations, and the legal expense that that entails, will unsettle executives of any super-successful company doing business in the European Union. Fines totalling €2 billion (£1.4 billion) have been given this year by the Commission to companies found guilty of running cartels.
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...included version had no improvements to the download version save that it was already installed for you and there was an icon on your desktop. In fact, the vast majority of knowledgable users considered IE to be significantly inferior to the Netscape product. But that desktop icon made all the difference; Netscape ended up going under - bought by AOL and now marketed as a low-end ISP.
This was MS's plan as proved at the US DOJ anti-trust trial (remember - MS was found guilty and the verdict upheld by 2 appeals courts; it was the penalty that was in question). It's part and parcel of MS's "embrace and extend" policy wherein they copy a successful product and incorporate it into Windows under the guise of "improvement" and force the other company out of business. You mention RealPlayer - look at what happened to their market after MS included Media Player into Windows!
I applaud the EU for their actions and for not allowing politics/$$$ to overcome law and equity!
DeanR, Virginia Beach, VA, US
The problem, John, is that by providing "value-added" products IN the operating system, MS is removing any incentive for a user to go and get a 3d-party product. Why, for example, go download/install/configure RealPlayer with WMP is right there on your desktop already? The case history of Netscape demonstrates this principle perfectly.
Netscape made the first web browser available to the average person. Yes, it cost $45 (if memory serves...) but you could download and run the free, full-featured demo forever so you didn't *have* to buy it. When MS belatedly decided to play in the Internet market space, they essentially cloned Netscape Communicator, slapped an MS logo on it and gave it away. It had a pretty lukewarm reception - Communicator was better known and there was no incentive to get IE. Then MS included it as "part of the Operating System" for Win98. No improvements to the program, mind you - the included version
DeanR, Virginia Beach, VA, US
Microsoft doesn't want to give up its strangle hold on the PC market. They want to milk the PC cow and are now looking for the internet domination. Their desire for retaining the domination is evident from the fact that MS advocates for the new openxml format for office applications when there is already another open format.
I think same is the case with all other IT product companies...Each company aims for more revenue from their exiting set of products. Cashing in on IP is ok, but it should not hinder the over all innovation.
Aravind, Bangalore, India
So does this ruling apply to French farmers? Can we expect a lawsuit against the French farming industry brought by African farmers? And how do you think the EU will rule then? After all African farmers are unlikely to afford the same sorts of cozy lunches and hotels for EU members that companies like Sun and Real Time can afford...
Inna Tysoe, Sacramento, CA/USA
These giants kill innovation and their fund managers dictate technology use and development. The Commission's action is laudible and will set a good example for business practices.
In the long run Eu is set to benefit from this.
maddy, mumbai, india
I think that Microsoft, as a company, produces a product that they have the right to sell for any amount that they choose. Nobody can dictate prices to them except to say that they have to sell above cost. There is no upper limit to what they could theoretically sell Windows for, whatever its configuration. I have been reading through the list on Google News and it appears that the price difference between versions with and without Windows Media Player is negligible. Microsoft has been giving the player away with their OS. Those who have the technological savvy to get RealPlayer can get RealPlayer and those who do not have a way to play their CDs and organize their music. RealPlayer is available for free online for those who want it. Having a media player pre-installed is very convenient for "technophobes" i.e. people who are less technologically savvy than Simon, like, say, my Grandmother. Microsoft is not taking away anyone's free choice. Microsoft is giving away software. Applause?
John , Bethany, Oklahoma
It's way beyond time for enforcing open standards, open protocols and open source.
IT is no longer a toolset for business - it is the only way to do business.
One business cannot be able to control all other businesses with proprietary standards, closed protocols and hidden source - it's anti-competitive.
Strong copyright protection, continued blocking of software patents in Europe and open community development will drive innovation far beyond anything witnessed before.
The future is simply open - and an open Europe will be primely positioned in the future...
Lloyd Hardy, Cork, Ireland
Finally, Micro$oft will have to stop encoding their documents in a way that makes import/export impossible.
Not only that, but everyone is on to their "proprietry" lock-in game.
Before now, techies were the only ones complaining about it...
It's not that I want to see Microsoft tumble, I just feel that they aren't willing to genuinely compete in a genuine manner and they tend to rely on the technophobia of most users...
simon, Oxford, UK