09.20.07
European Court Slaps Microsoft
In what has been called a “stinging rebuke”, the European Court of the First Instance (CFI) ruled against an appeal by Microsoft in a long-running case pitting the world’s largest software company against the European Commission.
The second-highest court in Europe on Monday rejected Microsoft’s attempt to overturn a landmark European Commission antitrust ruling and record fine, bolstering smaller software makers and putting market leaders on notice that they cannot leverage dominance in one technology niche to squelch broader innovation, industry and legal experts said
This from an article in the International Herald Tribune. I noticed that the article did not get all the details correct. For example, it said the court “ordered Microsoft to obey a 2004 commission order to share confidential computer code with competitors.” The only problem is that the court made no such order. This is about the languages that software programs speak to one another: protocols and file formats, and also about illegal bundling of Windows Media Player as a way to squeeze RealPlayer out of the market. It has nothing to do with sharing code.
In my experience, RealPlayer is an inferior product, so given the choice, most users will choose WMP over Real, although they might choose to use Quicktime instead of either one. The problem, which even many technical people do not understand, is in using dominance in one area (such as operating systems) to push you into dominance in another area (such as media players or Web browsers). It violates a longstanding prohibition on misusing an existing monopoly in order to build another one.
“What the court did was uphold EU law, which makes it illegal to leverage a dominant market position to obtain similar dominance in another area,” said Michael Reynolds, a Brussels antitrust lawyer with the firm Allen & Overy who filed the initial complaint against Microsoft in 1998 on behalf of Sun Microsystems. “Microsoft argued that the software industry, because of its dynamic growth, was an exception. But the court dismissed this argument.”
The US has similar laws, but the Department of Justice is lax about enforcement, believing that it is better to let the market sort things out. The problem with that is when you have situations where the market fails to remedy the wrongs. An example of that is when one provider obtains monopoly share of the market. Competitors, if they exist, fight over the crumbs that are left over, never being serious challengers to the monopolist. The monopolist, in this case Microsoft, then gets away with all sorts of abusive and questionable (if not illegal) behavior.
The question for non-technical people is this: what does this mean to the users and purchasers of computer software? It means that, assuming that Microsoft behaves according to the law, consumers will have more choice–choice of operating systems, of media players, office suites and more. Businesses will have more choice of operating systems and other software to use on their servers. Many of the choices that are available are less costly than Microsoft products, so for many people and businesses, this is good for the wallet.
I encourage you to open your eyes and look around. The choices that are available already would surprise you. Look at the Ubuntufamily of GNU+Linux operating systems, the StarOffice, OpenOffice, KOffice, and now Lotus Symphony office suites, and an incredible variety of other ready-for-prime-time software applications that are available now. Many of them were not ready just a few years ago (although I have to say that for someone that was willing to do a little work, the software was already even with commercial competitors).
Recognize that even big companies will eventually get punished for wrongdoing, but they often continue to do wrong anyway. The best thing to do is to spread your dollars around so that no single company controls your (or your business’s) destiny.
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