Microsoft Ruling Sparks Debate

By Roy Mark  |  Posted 2007-09-21 Print this article Print

However, not everyone applauded the ruling— not necessarily because it hurt Microsoft but, in a larger sense, because they said it called into question how the European Commission will deal with U.S. technology companies in the future. Lars Liebeler, antitrust counsel for the Computing Technology Industry Association trade group, in Oakbrook Terrace, Ill., said the European courts finding that Microsoft engaged in anti-competitive conduct by including Windows Media Player in its operating system ignored the realities of the software innovation process and laid the groundwork for further regulatory involvement in product design in the sector.
"This trend interferes with the workings of the free market and reduces consumer choice in the marketplace," Liebeler said.
"The decision ignores the development of the media player market in the years since the commissions decision, wherein a rich stream of new non-Microsoft products, such as [Adobes] Flash and [Apples] iPod [and] iTunes, have been developed and effectively marketed in conjunction with the continued widespread use of the Windows operating system," Liebeler said. To view an eWEEK slieshow about the history of Microsofts EU antitrust case, click here. Justice Department officials and lawmakers also voiced concern that the ruling will slow down innovation and competition by U.S. technology companies. The comments underscore what appears to be a growing difference between the United States and Europe in antitrust law. "U.S. courts recognize the potential benefits to consumers when a company, including a dominant company, makes unilateral business decisions, for example, to add features to its popular products or license its intellectual property to rivals, or to refuse to do so," said Thomas Barnett, assistant attorney general for the departments antitrust division. "In the United States, the antitrust laws are enforced to protect consumers by protecting competition, not competitors," Barnett said. "We are … concerned that the standard applied to unilateral conduct by the [court], rather than helping consumers, may have the unfortunate consequence of harming consumers by chilling innovation and discouraging competition," Barnett said. Neelie Kroes, the European commissioner for competition policy, said during a press conference Sept. 17 that the decision set an important precedent for the commission to regulate competition in the technology market. "The court has confirmed that Microsoft cannot regulate the market by imposing its products and services on people," Kroes said. "The court has confirmed that Microsoft can no longer prevent the market from functioning properly and that computer users are therefore entitled to benefit from choice, more innovative products and more competitive prices." Kroes said that since Microsofts decision to appeal the 2004 ruling, businesses and consumers have suffered. Over that time, she said, "Microsofts market share has grown to 80 percent of workgroup servers, up some 40 percent when the commissions investigation began." As to what impact the U.S. and EU antitrust rulings have had on Microsofts behavior, Matt Rosoff, an analyst at Directions on Microsoft, said the software maker seemed slightly more hesitant about bundling previously separate features into Windows. Rosoff cited Microsofts Web search efforts, where the software maker has so far had very little success gaining market share against Google. "The Microsoft of old might have bundled Web search results into the Vista desktop search interface, but with these antitrust rulings in place, that would have been obvious grounds for complaint," Rosoff said. Check out eWEEK.coms for the latest news, views and analysis on servers, switches and networking protocols for the enterprise and small businesses.


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