'Preposterous' EU charges forced 'puckish' Microsoft move, says antitrust expert

By , Computerworld |  Legal, antitrust, Internet Explorer

Microsoft's plan to dump Internet Explorer (IE) from Windows 7 for the European market is a move to discredit antitrust regulators by tying its proposal to a failed enforcement effort from 2005, a noted antitrust expert said today.

"It's sort of a puckish thing to do, when you think about it," said William Page, co-author of The Microsoft Case: Antitrust, High Technology, and Consumer Welfare (University of Chicago Press, 2009). "Their solution is a little bit like Windows XP [and Vista] 'N,' which dramatizes that the EU essentially wants the same thing this time. But everyone knows that 'N' was a total flop."

Windows XP N, and later, Windows Vista N, were special editions that omitted Windows Media Player, which Microsoft was forced to create for Europeans after losing an earlier antitrust case. By all accounts, Windows XP and Vista N have been major busts, with few copies sold and no computer makers installing them on new PCs.

Microsoft's obvious attempt to tie its solution to the failed "N" editions of 2005 -- it went so far as to say it will slap the letter "E" on the Windows 7 editions that omit IE -- is probably one reason why the EU has turned a cold shoulder to the company's plan, said Page.

"The Commission had suggested to Microsoft that consumers be provided with a choice of Web browsers," EU regulators said today in a statement. "Instead Microsoft has apparently decided to supply retail consumers with a version of Windows without a Web browser at all. Rather than more choice, Microsoft seems to have chosen to provide less."

The European Commission, the EU's antitrust agency, made it clear that Microsoft's proposal will probably not be enough. "In terms of potential remedies, if the Commission were to find that Microsoft had committed an abuse, the Commission has suggested that consumers should be offered a choice of browser, not that Windows should be supplied without a browser at all."

Regulators also implicitly called out the Windows XP N solution today, noting that its assessment of Microsoft's actions -- the commission charged Microsoft with illegally shielding IE from competition by bundling it with its operating systems -- would be guided by the successful case against the company over "tying" Windows Media Player to the OS.

Puckish Microsoft's move may be, but it's also one that should never have been necessary, said Page, who is on the faculty of the Levin College of Law at the University of Florida. "My problem all along with the EU's actions is that with all versions of Windows, OEMs have had the freedom to uninstall IE and install other browsers. But they haven't done that."

Because Microsoft's Windows 7 E will lack IE, the company has said computer makers -- OEMs in the parlance -- will be able to pick which browser or browsers they want to install on the systems they sell.

Nor is Page sympathetic to the browser makers who complained of Microsoft advantage. "It's just preposterous, all this angling," Page said. "What we're seeing is an effort to get the government to give some browser makers a leg up."

The commission's January 2009 charges against Microsoft stemmed from a December 2007 complaint by Opera Software, the Norwegian developer whose Opera browser has less than 1% of the market, according to recent data from Web metrics firm Net Applications. Since January, Mozilla and Google, which make Firefox and Chrome, respectively, have joined the case as "interested third parties," which lets them participate in a limited fashion.

"In the end it's just not going to make much difference to consumers," Page said, referring to Microsoft's stripping of IE from Windows 7. "Ultimately, it will be a lot of sound and fury that signifies nothing."

Meanwhile, John Lilly, the CEO of Mozilla, wondered whether Microsoft's plan might be little more than a magic trick.

"It's impossible to evaluate what [Microsoft's proposal] means unless and until Microsoft describes -- completely and with specificity -- all the incentives and disincentives applicable to Windows OEMs," said Lilly in an e-mail late Thursday. "Without this, it's impossible to tell if Microsoft is giving something with one hand and taking it away with the other. More to the point, it's impossible to tell whether this does anything more than change the technical installation process of the OEMs and make life more difficult for people upgrading to Windows 7."

Opera, on the other hand, has been quick to dub Microsoft's plan as completely unsatisfactory. Yesterday, the company's chief technology officer, Hakon Wium Lie, said stripping IE from Windows 7 wouldn't "let them off the hook."

Friday, Opera's CEO, Jon von Tetzchner, said that Microsoft was trying to set the terms of the punishment for its own antitrust violations. "If Microsoft got its way, there would be no ballot screen, just a version of Windows that has no browser at all -- just like the edition 'N' of Windows that resulted from the earlier European antitrust case," von Tetzchner told the IDG news service.

"In a way, this has come full circle, browser tying," said Page, talking about the U.S. government's 1998 charge that Microsoft abused its monopoly position to drum rival browser Netscape out of business. "But it's also unfinished business, because the [U.S.] government failed to prove its case."

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