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New Antitrust Complaint Filed Against Microsoft
jimboid and others wrote in about a new antitrust complaint filed against Microsoft in the European Union, concerning Windows XP (all previous litigation has concerned earlier versions of Windows). The BBC and Sydney Morning Herald have articles about the complaint.
Could be good. ;)
"To any truly impartial person, it would be obvious that I am right."
See The Register for another take on the matter.
CCIA COMPLAINT AGAINST MICROSOFT
KEY FACTS
When: CCIA's complaint was formally filed with the European Commission Directorate General
for Competition on 31 January 2003.
Background: The Windows desktop operating system is installed on over 93% of personal
computers in Europe and worldwide. Microsoft has held a dominant position on this market
position for the past decade. Microsoft also has a monopoly in the market for personal productivity
applications (word processors, spread sheets, etc) and the market for Internet browsing software.
Microsoft's behaviour in the market has been the subject of ongoing competition scrutiny since
1991. Its behaviour has resulted in both an "undertaking" with the European Commission in 1994
and a unanimous liability finding by the United States Court of Appeals for the District of Columbia in 2001.
Microsoft has systematically and deliberately engaged in illegal practices designed both to protect its Windows monopoly and leverage it into adjacent software markets. Microsoft has used its market power to eliminate competition and stifle innovation in market after market. Unprecedented in modern commerce, Microsoft's monopolies generate margins in excess of 80 percent and profits in excess of US$1 billion per month.
Microsoft's well-documented anticompetitive campaign against Netscape's Navigator web browser
and Sun's Java programming language has resulted in a new monopoly in Internet browsing
software, and sets the stage for the current CCIA complaint.
Focus of the Complaint: The latest version of Windows XP takes Microsoft's abusive practices to
a new level, illegally protecting Microsoft's existing monopolies and is illegally eliminating
competition in new software and service markets. This complaint seeks the intervention of the
European Commission to put an end to the multiple forms of abuse inherent in Windows XP.
The 260-page complaint comprises an exhaustive factual and legal basis for Commission action,
documenting multiple ways in which Windows XP violates Article 82 of the EC Treaty prohibiting
abuse of a dominant position. These abuses include:
Explorer, Outlook Express, Windows Media Player, Windows Messenger, and Windows Movie
Maker 2;
Biasing the user interface and operation of Windows XP to significantly advantage Microsoft's
own software and services over competitive offerings;
Refusing to fully disclose the document formats for the programs in Microsoft's Office suite of
applications, in order to reinforce the "applications barrier to entry;"
Imposing proprietary technologies, formats and protocols in Microsoft's dominant products with
the effect of excluding competition on the merits;
Imposing abusive licensing and other exclusionary practices vis-à-vis personal computer makers
to foreclose the most important distribution channel from competing products;
Leveraging dominant positions to distort competition in markets for e-mail and collaboration
server software;
Leveraging existing dominant positions to the markets for handheld computing devices and
smart phone software through bundling, failure to supply interface information, and the use of
proprietary formats and protocols.
Legal basis of complaint: The facts alleged in the CCIA complaint rest squarely within Article 82 of
the EC Treaty.
Article 82 imposes on dominant market players a special responsibility not to allow their
conduct to impair genuine undistorted competition on the common market, and prohibits such
firms from limiting markets, production or technical development to the detriment of consumers.
Microsoft uses methods other than those falling within the scope of competition on the merits to
eliminate competitors and thereby strengthen its multiple positions of superdominance. For
example, Microsoft's bundling in Windows XP squarely falls within Article 82's prohibition on
tying, foreclosing competition for the bundled Microsoft products, and leveraging Microsoft's
market power into new markets. The Court of First Instance of the European Union recently
reaffirmed the illegality of such behaviour in its Tetra Laval decision.
Impact on Consumers: Microsoft's anticompetitive conduct with Windows XP directly impacts
consumers in multiple ways.
Fewer choices of software products and very limited differentiation among personal computer
offerings;
Less innovation in the critical software markets which Microsoft dominates;
Higher prices for Microsoft's software products than would otherwise occur in a competitive
market;
Rampant security breaches in Microsoft's core products resulting from the lack of market forces
to develop secure software;
Less privacy associated with the manner in which Microsoft biases its consumer services in
Windows XP.
Intersection with Current Case: This is a separate complaint. Actions taken by the Commission
pursuant to its existing Statement of Objections cannot address the unlawful conduct inherent in
Windows XP, which include new abuses intended to extend its existing desktop monopolies.
Good point, amigaluvr. I think that Microsoft has definitely used the speed of technological innovation and the slowness of the courts to their advantage in past fights.
Take the lawsuits over the crushing of Netscape. MS just went about capturing 90% of the browser market while the lawyers were still fighting. Additionally they used to stall time to permanently imbed the browser deeply into the OS to help prop up a claim later on that it would be too difficult to extract the browser from the OS as a remedy.
Technological progress has merely provided us with more efficient means for going backwards. -- Aldous Huxley
In a word, no. Yes these things are "bundled" with most linux distros BUT they are many and varied...there is REAL choice. You are not expected nor forced (indirectly nor directly) to choose email client X, browser Y, etc. Even in cases where the choice is made for you (RedHat) it is still very much an option that you can easily not go with. Redhat doesn't fail to bundle the remaining apps, they just make a default choice for you.
M$ is a different fish. They use an (artificially created and illegally maintainted) OS monopoly to push THEIR apps on everyone else, making more money and increasing the breadth of the monopoly. They use illegal and unethical means to induce use of their products at the expense of everyone else (special tie-ins to their OS so their apps appear to work better than outsider apps, sometimes causing artificial breakage of competing apps to make it seem theirs is actually defective).
Given the (still) lack of choice in OS upon new PC purchase, they should be required to provide the competitor apps (free versions of Realplayer, quicktime player, mozilla, etc, and let people actually have/make choices). They mustn't be permitted to perpetuate artificial barriers for the use/adoption of competing tools/apps. It is the leveraging of one monopoly to produce more monopoly that is particularly naughty and a no-no.
In any case, an OS is NOT a web browser, media player, email client. An OS is an OS and these other things are SEPARATE and INDEPENDENT applications that work through the OS.
In Bushworld, they struggle to keep church and state separate in Iraq as they increasingly merge the two in America.
Nevermind that you HAVE to send out .DOC format resume's to find a job anymore.
But why pirate MS Office, when OpenOffice.org can export into .DOC format?
> How long can this go on for?
;-)
As long as Microsoft has a lock on most of the market for PC operating systems.
> you cant keep pulling the same company for antitrust violations..
The courts can keep pulling them in as long as they please. There is no "double jeopardy" for antitrust.
> wasnt Microsoft supposed to be split up?
One judge said "yes," another judge said "no."
> what ever happened there?
The judge that said "yes" was openly offended by a bumbled defense team, and then bumbled himself by reacting openly. It was then given to a new judge and tried by a prosecutor that was more sympathetic to Microsoft, not to mention a defense team who behaved in court.
> this is just going to carry on and on and on.. its getting pretty frustrating really.
Don't let it wreck your day. At least there is no _law_ that says you have to use Microsoft products. Just market forces
Hey, if it weren't for the fraud of MS breaking competitor's implementations and then lying about what happened, selling ISV kits as providing full access to the Windows API when they did not, and deliberate attempts to pollute things like Java and Kerberos, I wouldn't have much of a problem with MS.
The problem is that they're usually very good and when they can't win, they cheat. Cheating is just not acceptable as a core business practice.
3M is in a completely different category, a huge company that doesn't cheat. And who's complaining about them? Nobody. It's not the size, it's the behavior.
obTopic: I am not familiar with the anti-trust/monopoly laws of the UK. I understood the US suing MS because that is where the company is headquartered. How can a foreign country sue a corporation that does not reside within its borders?
Simple. You come to my country and conduct business, you do so according to my country's laws, not US laws. And suing has nothing to do with criminal laws anyway.
You open a store in uganda(sp?) and someone slips and falls on the steps, they sue you there. It doesn't matter a damn if you're American, British or whatever. Your being in another country subjects you to their laws.
That being said, if a company has no presense other than as an imported commodity, you've got to take a plane trip and sue them where their assets live.
Isn't this how all those gambling websites get away with it?
They are getting away with avoiding taxes or other laws, or doing what they do because it is legal in the jurisdictions they're doing what they do.
-- If at first you do succeed, try to hide your astonishment. -- Harry F. Banks
You've missed the point.
First, Red Hat "bundles" lots of different software *choices* -- many of which affect the same problem domain; Red Hat, therefore, encourages competition. Second, the apps Red Hat bundles are third party apps (in most cases) -- they are not apps that Red Hat specifically profits from or that allow Red Hat to unfairly secure a hold in a problem domain outside of Linux OS installation and administration; I am not aware of Red Hat bundling its own apps without including competing products that do the same thing (disclaimer: I'm a debian user) and even if they did, Red Hat does not prevent you from completely removing their product and installing a different one.
What Microsoft has done is to unfairly thwart competition by not only bundling software that clearly is outside the problem domain of "Operating Systems" in an attempt to push their own products but also by commingling their products; tying one product into another so tightly that the product cannot be removed without significant harm to the overall system.
Where is the option to remove Internet Explorer? Where is the option to remove Windows Media Player? They aren't there -- you can choose to use a different tool (one that likely does not operate as well because it is not as up-close-and-personal as the Microsoft equivalent) but you cannot completely remove Microsoft's tool. This gives Microsoft an unfair advantage over its competitors and thwarts competition in general (as proven by its monopoly conviction).
Now reconsider GNU "stuff": any of it can be removed and replaced with other software.
Don't like "ls"? Write/use a shell that uses "dir" instead. Don't like "gcc" -- don't install it (and don't bother bringing up the argument of how many OTHER tools require "gcc" in order to build them or whatever; those were dependency decisions made by the authors of THOSE tools -- GNU or otherwise).
If I were to write a complete replacement for the GNU libraries/tools and try to make a living off it in the Un*x/Linux world, how much money do you think I'd make?
Now that would depend on what your tool suite offers that other tool suites don't, wouldn't it? If your tool offers a better way of accomplishing the same thing, you *could* make a mint -- or not. That's one of the points of open source, isn't it? As a user, I can choose your tool if I like it better or stick with the proven tools; that is the real crux of why or why not your tool suite would succeed or fail.
GNU tools are established, stable, and well-documented; there is little incentive to adopt a new tool suite that does the same thing...but (and this is key) there is nothing preventing someone from doing so (and then removing the other tools).
In an open market, free from monopoly and antitrust activities, there is no guarantee that you will make money off of your efforts -- but there is a guarantee that you will have a fair chance to try. When Microsoft acted in violation of the Sherman Antitrust Act, it brought the magnifying glass to bear on its actions -- the "bundling" of IE and WMP may not have been such an issue if they were not also "commingled".
MS is taking ideas from Apple again.
Yes, but anything from Apple is wide open compared to the XBox 2.
Apple: PowerPC, PCI, Firewire, USB, IDE, SCSI, OpenBoot PROM, etc. etc. XBox 2: who knows?
Healthcare article at Kuro5hin