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Microsoft VS EU Round 2

Choose your Microsoft cliché. We’ve been down this road before; the more things change, the more the stay the same; or be careful what you ask for because you just might get it. They all apply. Remember 1996 when Microsoft decided that a company called Netscape was having way too much fun all by itself dominating the browser market? It didn’t take long for Microsoft to carve out its own dominant position by “bundling” Internet Explorer with their already ubiquitous Windows operating system. “Not fair!” cried Netscape and the European Union agreed, slapping Microsoft with the world’s largest ever anti-trust fine (€1.7 Bn). Despite the record fine, IE went on to glory and Netscape…well when was the last time you used Netscape?

In the previous case, in addition to the fine, Microsoft was ordered to make unbundled versions of Windows available to consumers. The fine hurt, the unbundling accomplished absolutely nothing, because nobody bought the Windows versions that came without IE (the two versions of Windows were sold for the same price). Now it seems that Microsoft is up to its old tricks.

The new complaint is nearly identical to the one brought over a decade ago, although we have a new David attempting to slay the Windows Goliath. This time around, a small Norwegian software company, Opera Software, is hoping to force Microsoft into offering its competing browser software, or force Microsoft to cease bundling its own browser with the Windows program.

While Opera stands to gain from having its browser software readily available on any computer that runs Windows, Microsoft seems to be taking a different stance than they did in the previous case. Paying the fine and offering a version of Windows that nobody wanted kept the EU at bay the last time, but this time the commission wants a true solution, and it seems that Microsoft has offered one, but not exactly the one that the EU had in mind.

Yesterday, Microsoft announced that Windows 7, which hits the market in the EU in October of this year, will carry no browser software at all! This is Microsoft’s version of, “Play the game by my rules, or I’m going home and taking my ball with me!” To say the European Commission was disappointed with the company’s stance would be an understatement.

The commission quickly made clear that they preferred Windows to be bundled with a choice of browsers, not a Windows completely void of them. In an official statement on the negotiations, the Commission stated, “Rather than more choice, Microsoft seems to have chosen to provide less.”

So, in the interest of protecting consumers from an operating system monopoly, the European Commission is putting pressure on Microsoft, however the end result is not likely to benefit the consumer. The last time around, Microsoft paid their fine and came up with a solution that really did not solve the problem, and so here we are again more than 10 years later. Does the company have an ace up its sleeve? The commission seems to be considering that possibility, warning that “…the long standing nature of Microsoft’s conduct” demonstrates that “(the removal of Internet Explorer) could be negated by other actions by Microsoft.”

See you again in 10 years!

I’d like to know:

(1) What is your browser of choice? Are you loyal, or do you use different browser programs for different needs?

(2) In your opinion, is Microsoft using its dominant position in operating system software to control other software markets? If so, is this behavior anti-competitive?

(3) Should the European Commission take a look into other instances of Microsoft’s bundling of programs such as media players, anti-virus protection, word processing, etc.?

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